Trade’s very important we’re told:
When exports account for 30% of Britain’s GDP
No, that’s not right.
Exports have a value equivalent to 30% – ish of GDP, that’s true. But that’s not the same as “account“.
United Kingdom had a total export of 468,322,416.15 in thousands of US$ and total imports of 692,494,170.35 in thousands of US$ leading to a negative trade balance of -224,171,754.21 in thousands of US$ The Effectively Applied Tariff Weighted Average (customs duty) for United Kingdom is 1.72% and the Most Favored Nation (MFN) Weighted Average tariff is 2.68%.The trade growth is -2.97% compared to a world growth of -1.13%. GDP of United Kingdom is 2,829,110,000,000 in current US$. United Kingdom services export is 403,646,000,000 in BoP, current US$ and services import is 271,398,000,000 in Bop, current US$.United Kingdom exports of goods and services as percentage of GDP is 31.60% and imports of goods and services as percentage of GDP is 32.69%.
There’s the 30% -ish.
But the GDP equation is C + I + G + (X-M).
It is net exports which make it into GDP. The trade surplus, or in our case, deficit.
Another way to approach the same point. GDP is not turnover, it’s value added. But the exports figure is turnover, not value added.
We can even go further. Some of those exports are made from value added to imported goods. So, the addition to the UK economy, in terms of value added or created, is the net value added to those imports, right? Not the raw turnover figure for goods and services sent abroad.
UK exports amount to a number equal to 30% (-ish) of UK GDP. Exports do not account for 30% of UK GDP.