The EU is one of the world's largest players in the global trade of goods and services. For trade in goods between the 28 EU member states and the rest of the world, there was a deficit in trade between 2000 and 2012, in that the value of imports was larger than exports. This situation reversed in 2013 when there was a surplus of EUR42 billion. A surplus for trade in goods continued until 2017 reaching EUR137 billion, before turning into a small deficit of EUR25 billion in 2018.
International trade in goods
The EU, the United States, and China accounted for 45 percent of world trade in goods in 2017 and continue to be the major players. The main EU partner for exports in 2018 was the United States and for imports China. Machinery and transport equipment accounted for more than 41 percent of EU exports and 31 percent of EU imports in 2018.
The 28-member EU accounts for about 15 percent of the world’s trade in goods, which is about three times more than its trade in services, some of which can be hard to trade across borders.
Germany contributed 28 percent of all EU-28 trade of goods to non-member countries in 2018 and 18.6 percent of the EU-28’s imports. The next three largest exporters were the UK at 11 percent, Italy at 10.5 percent and France at 10.4 percent, recording no change from 2017. The largest importers from non-member countries in 2018 after Germany were the Netherlands at 14.9 percent, the UK at 14.2 percent, France at 8.9 percent and Italy at 8.7 percent. The Netherlands high share is partly explained by a vast number of goods that arrive through the EU’s leading seaport at Rotterdam.
In 2018, among the 28 EU member states, trade surplus in goods was recorded in Germany, with EUR360.9 billion, followed by Ireland with EUR70 billion and Italy with EUR67.5 billion. In the same year, the largest trade deficits for trade outside of the EU in goods were EUR272.5 billion for the Netherlands and EUR121.5 billion for the United Kingdom
The export of goods between EU member states was valued at EUR3.52 trillion in 2018, while exports leaving the EU to non-member countries reached EUR1.96 trillion.
Between EU member states there was no decline in imports between 2017 and 2018, and both Malta and Ireland saw double-digit growth of 20.8 percent and 13.2 percent respectively. Exports increased five percent across the EU member states for the same period, with Malta registering 23.3 percent growth, Greece 13.9 percent, Ireland 12.3 percent and Slovenia 10.8 percent, with only Luxembourg recording a reduction of -1.9 percent.
Between EU member countries, Germany was also the highest exporter (22.2 percent) and importer (20.9 percent) in 2018, with the Netherlands (13.0 percent) the only other member state contributing more than one-tenth of internal state exports, mostly because of Rotterdam port. France, at 11.5 percent, was the only other member state to account for more than one-tenth of internal imports.
The EU’s internal market
When combining exports and imports, trading goods in the EU’s internal market continues to be more profitable than non-EU trade, though the variability across member states is considerable, partly due to historical ties and more so geographical location, with the highest trade of around 80 percent of internal EU member states trade between Hungary, the Czech Republic, Slovakia, and Luxembourg. The figure for the UK is the lowest at 50.3 percent.
In March 2017, the UK triggered Article 50 of the Treaty on European Union by formally notifying the EU of its intention to leave the EU. The original date for the UK ceases to be a member state of the EU was 28 March 2019, but the most recently agreed date is now 31 October 2019. The Withdrawal Agreement provides for a transition period until 31 December 2020. During this transition period, the UK will continue to participate in the EU Customs Union and the Single Market and follow all EU policies. When the UK leaves the EU, it will have its own independent trade policy and remain a member of the World Trade Organization.
In May 2018, the European Council adopted negotiating directives for free trade agreements (FTAs) with Australia and New Zealand. In December 2017, the EU finalized the negotiations of an Economic Partnership Agreement with Japan, which came into force on 1 February 2019. The EU is also negotiating FTAs with Argentina, Brazil, Paraguay, Uruguay, and Mexico. In April 2018, the EU and Mexico reached a political agreement in principle trade with the EU.