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Economy
Jun 18, 2026
Analyzed by GPT OSS 120B

Rejoining the Customs Union Would Only Partially Repair Brexit’s Trade Damage, Study Finds

AI Summary
Research from the Centre for European Reform finds that Brexit has reduced UK exports to the EU by 12%, with services down 7% and goods down 16%. Rejoining the EU customs union would only recoup a small share of this loss, while larger gains would require a single‑market return, which carries substantial political costs.

New research from the Centre for European Reform shows that Brexit has cut UK exports to the EU by 12%, and that rejoining the EU customs union would only recover a small fraction of the loss.

The Study Quantifies Brexit’s Trade Decline

  • Exports to the EU are 12% lower than they would have been without Brexit.
  • Services exports are 7% lower; goods exports are 16% lower.
  • Leaving the single market accounts for roughly 10% of the total export decline.

Numbers Reveal a 12% Export Drop, with Services and Goods Hit Hard

The researchers, John Springford and Anton Spisak, used detailed trade data and economic modelling to isolate the impact of regulatory costs versus customs barriers, finding regulatory frictions to be the dominant factor.

Why a Customs Union Re‑entry Offers Limited Relief

  • Rejoining the customs union would remove “rules of origin” checks, modestly easing goods trade.
  • It would not address the larger services‑sector losses, which drive most of the export gap.
  • It would also prevent the UK from striking independent non‑EU trade deals, as customs‑union members must apply EU tariffs.

Political Landscape and Future Trade Options

Labour leaders Keir Starmer and Rachel Reeves are pushing for a closer EU relationship, while the Liberal Democrats now favour re‑entering the single market. Some Labour leadership hopefuls, such as Andy Burnham and Wes Streeting, have floated full EU re‑membership. The study warns that any move toward the single market would require accepting free movement, EU budget contributions, and alignment with EU rules without voting rights.

Outlook: Modest Gains vs. Complex Trade‑offs

Even a full customs‑union return would only modestly improve overall trade, leaving the bulk of Brexit‑induced losses unrecovered. The authors conclude that only a single‑market reintegration—or eventual EU membership—could close the gap, but both paths involve significant political concessions.