Geography is everything in UK-EU trade

A graph can tell many stories. The FT’s Martin Wolf welcomes a recent book on Brexit by his colleague Peter Foster, reminding us how “a classic populist alliance of fanatics and opportunists mixed simplistic analysis with heated rhetoric and outright lies to weaken the UK’s most important economic relationship and threaten its domestic stability”. Two paragraphs later Wolf, a great respecter of data, offers two lines on a graph that between them show three things. 1: Since Brexit, the UK’s trade deficit with the EU has widened. 2: Since Brexit, the UK’s imports from and exports to the EU have both risen, even if the latter haven’t risen by much. Brexiteers may seize on 2 as evidence of the resilience of British trade even in the face of enormous self-imposed barriers and costs. But (3) these lines also make the central macroeconomic case against Brexit, namely that you can’t ignore geography. British trade with the EU is resilient despite everything because Europe is next door, which is why the customs union and single market were no-brainers for smart people like Margaret Thatcher.