Heathrow banking on non-EU trade boost, but highlights need for government support

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The UK’s Heathrow Airport has highlighted new research that suggests the UK could undergo an economic pivot post-Brexit, with non-EU trade potentially increasing by 20% over the next five years from nearly £473bn (US$653bn) in 2019 to £570bn (US$787bn) in 2025.

According to the Centre for Economics & Business Research, aviation will need to be at the heart of this pivot. The findings suggest that the value of trade through Heathrow to non-EU countries could increase by 11% by 2025, while trade with EU countries decreases by 7% over the same period. Regions across the UK would benefit from these new trading links, with Heathrow playing a key role in opening up valuable new markets from Asia-Pacific and Australia to the USA.

Aviation is critical to the government’s plans for a Global Britain post-Brexit. Heathrow states that it alone has the potential to facilitate a £204bn (US$281.6bn) trade bonanza benefitting British businesses in every corner of the country, creating opportunities for the entire aviation sector and strengthening the UK’s trade network.

However, this trade boost won’t be realized unless the UK’s aviation industry is supported by government policies and allowed to resume. Industry figures for May show that some of the European competitors that benefitted from sector-specific support during the pandemic, such as the Netherlands and Germany, are seeing the fastest growth. Cargo tonnage at the UK’s hub airport is still down 19% on 2019 levels, compared with both Schiphol and Frankfurt, which have surpassed their 2019 levels, growing by 14% and 9% respectively over the same time period.

This research comes as Heathrow has been working with British Airways and Virgin Atlantic to launch trials that aim to help government and industry understand how to practically ease restrictions for fully vaccinated passengers, a move which is key for restarting travel and trade. By capitalizing on the country’s vaccine dividend, ministers can help to deliver this economic stimulus for exporters across Britain, ensuring the UK retains its competitive edge as the country comes out of lockdown.

The Global Britain report revealed that:

  • By 2025, the value of trade through Heathrow could grow to over £204bn (US$281.6bn) [up from £188bn (US$259bn) in 2019], representing 21.2% of the UK’s total trade in goods and 14.6% of its trade in goods and services.
  • The growth in trade could boost every part of the UK. Regions with high manufacturing propensities – including the Midlands and North East – are likely to benefit most from future trade agreements with fast-growing economies around the world. Scotland and Wales could also benefit from increased trade in agriculture, forestry and fishing.
  • Heathrow could help drive future Free Trade Agreements – with 46% of trade by value with CPTPP countries facilitated through the airport – while the airport is ideally placed to play a major role in deals with the USA and Australia.
  • Heathrow is a major facilitator of UK trade accounting for two thirds of all trade transported by air in the UK (by value), with this figure rising to over 75% for non-EU trade.
  • While 90% of the UK’s trade by volume is transported by sea, high value goods are transported by air. Heathrow is the UK’s largest port by value, accounting for 21.2% of UK trade in goods by value in 2019.

Heathrow CEO John Holland-Kaye commented on the research, “Heathrow is well placed to supercharge the government’s Global Britain ambitions and deliver a post-lockdown, post-Brexit economic stimulus worth billions of pounds. As the UK’s only hub airport and largest port by value, we are ready to play a central role in creating economic opportunities for businesses across the country, facilitating new free trade agreements and serving as a vital link to our key trading partners.

“Ministers must seize the opportunity to secure this crucial economic boost by backing British aviation and its own vaccination program by safely easing travel restrictions for fully vaccinated passengers from July 19.”

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Lawrence has been covering engineering subjects – with a focus on motorsport technology – since 2007 and has edited and contributed to a variety of international titles. Currently, he is responsible for content across UKI Media & Events' portfolio of websites while also writing for the company's print titles.

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