Trade with UK will be more difficult and expensive post-Brexit, Swedish government warned

Trade between the UK and Sweden will be both more expensive and more difficult after Brexit, a new report commissioned by the Swedish government has warned.

Trade with UK will be more difficult and expensive post-Brexit, Swedish government warned
Trade with the UK will be more expensive and tricker post-Brexit, Sweden's government has been told. Photo: Matt Dunham/AP

The report by Sweden’s National Board of Trade (Kommerskollegium) looked into how the trade of services between the EU and UK may be regulated once Britain leaves the union, and also provided alternatives for how customs and trade procedures for goods could be regulated.

“The UK is an important trade partner for Sweden and we hope that will continue in the future. But it is clear that it will be both more expensive and more difficult to trade with the UK after Brexit, and we need to look at possible solutions to reduce the negative effects on trade,” Sweden’s EU affairs and trade minister Ann Linde said in a statement after receiving the report on Tuesday.

The 177-page study does not paint a particularly encouraging picture. It notes that “regardless of which alternative is the result of the exit process, there will be a worsening in trade between the EU and the UK compared to today”.

The document explains that customs procedures will return from the first day that the UK is no longer a member of the EU, meaning “increased administration, increased costs, and reduced stability in the flow of goods”.

“The possibilities of making the customs procedures easy for countries which leave the customs union are small, and the risk of substantial administrative burdens and complicated trade procedures is serious,” Linde commented.

The Kommerskollegium study also warned that businesses are likely to adjust to a worsened trade situation by looking for new markets other than the UK to work with:

“Trade and businesses adjust themselves according to opportunities and hindrances. Trade patterns are not static, and it can be assumed that other markets will be prioritized over the British one if the UK leaves the single market.”

The study calculated that half of the UK's trade currently occurs with EU nations, with 53 percent of its imports coming from the EU and 44 percent of its exports going there. About 1.7 percent of the UK’s imports come from Sweden while 1.5 percent of its exports go there.

Sweden imported 62 billion kronor ($6.92 billion) worth of services and the same amount in goods from the UK in 2016. That same year, Sweden exported services worth 51 billion kronor ($5.69 billion) and goods worth 72 billion kronor ($8 billion) to the UK.

A more general conclusion from the document is that the EU single market clearly benefits the trade of goods and services compared to other alternatives:

“A deep and broad free trade agreement similar to the ones the EU has with Canada, Ukraine or South Korea, even in its most ambitious form, does not provide the benefits the single market does.”

The report is set to be an important contribution in shaping Sweden's position during the forthcoming Brexit negotiations between the UK and EU.


How Europe’s population is changing and what the EU is doing about it

The populations of countries across Europe are changing, with some increasing whilst others are falling. Populations are also ageing meaning the EU is having to react to changing demographics.

How Europe's population is changing and what the EU is doing about it

After decades of growth, the population of the European Union decreased over the past two years mostly due to the hundreds of thousands of deaths caused by the Covid-19 pandemic.

The latest data from the EU statistical office Eurostat show that the EU population was 446.8 million on 1 January 2022, 172,000 fewer than the previous year. On 1 January 2020, the EU had a population of 447.3 million.

This trend is because, in 2020 and 2021 the two years marked by the crippling pandemic, there have been more deaths than births and the negative natural change has been more significant than the positive net migration.

But there are major differences across countries. For example, in numerical terms, Italy is the country where the population has decreased the most, while France has recorded the largest increase.

What is happening and how is the EU reacting?

In which countries is the population growing?

In 2021, there were almost 4.1 million births and 5.3 million deaths in the EU, so the natural change was negative by 1.2 million (more broadly, there were 113,000 more deaths in 2021 than in 2020 and 531,000 more deaths in 2020 than in 2019, while the number of births remained almost the same).

Net migration, the number of people arriving in the EU minus those leaving, was 1.1 million, not enough to compensate.

A population growth, however, was recorded in 17 countries. Nine (Belgium, Denmark, Ireland, France, Cyprus, Luxembourg, Malta, Netherlands and Sweden) had both a natural increase and positive net migration.

READ ALSO: IN NUMBERS: Five things to know about Germany’s foreign population

In eight EU countries (the Czech Republic, Germany, Estonia, Spain, Lithuania, Austria, Portugal and Finland), the population increased because of positive net migration, while the natural change was negative.

The largest increase in absolute terms was in France (+185,900). The highest natural increase was in Ireland (5.0 per 1,000 persons), while the biggest growth rate relative to the existing population was recorded in Luxembourg, Ireland, Cyprus and Malta (all above 8.0 per 1,000 persons).

In total, 22 EU Member States had positive net migration, with Luxembourg (13.2 per 1 000 persons), Lithuania (12.4) and Portugal (9.6) topping the list.

Births and deaths in the EU from 1961 to 2021 (Eurostat)

Where is the population declining?

On the other hand, 18 EU countries had negative rates of natural change, with deaths outnumbering births in 2021.

Ten of these recorded a population decline. In Bulgaria, Italy, Hungary, Poland, and Slovenia population declined due to a negative natural change, while net migration was slightly positive.

In Croatia, Greece, Latvia, Romania and Slovakia, the decrease was both by negative natural change and negative net migration.

READ ALSO: Italian class sizes set to shrink as population falls further

The largest fall in population was reported in Italy, which lost over a quarter of a million (-253,100).

The most significant negative natural change was in Bulgaria (-13.1 per 1,000 persons), Latvia (-9.1), Lithuania (-8.7) and Romania (-8.2). On a proportional basis, Croatia and Bulgaria recorded the biggest population decline (-33.1 per 1,000 persons).

How is the EU responding to demographic change?

From 354.5 million in 1960, the EU population grew to 446.8 million on 1 January 2022, an increase of 92.3 million. If the growth was about 3 million persons per year in the 1960s, it slowed to about 0.7 million per year on average between 2005 and 2022, according to Eurostat.

The natural change was positive until 2011 and turned negative in 2012 when net migration became the key factor for population growth. However, in 2020 and 2021, this no longer compensated for natural change and led to a decline.

READ ALSO: IN NUMBERS: One in four Austrian residents now of foreign origin

Over time, says Eurostat, the negative natural change is expected to continue given the ageing of the population if the fertility rate (total number of children born to each woman) remains low.

This poses questions for the future of the labour market and social security services, such as pensions and healthcare.

The European Commission estimates that by 2070, 30.3 per cent of the EU population will be 65 or over compared to 20.3 per cent in 2019, and 13.2 per cent is projected to be 80 or older compared to 5.8 per cent in 2019.

The number of people needing long-term care is expected to increase from 19.5 million in 2016 to 23.6 million in 2030 and 30.5 million in 2050.

READ ALSO: How foreigners are changing Switzerland

However, demographic change impacts different countries and often regions within the same country differently.

When she took on the Presidency of the European Commission, Ursula von der Leyen appointed Dubravka Šuica, a Croatian politician, as Commissioner for Democracy and Demography to deal with these changes.

Among measures in the discussion, in January 2021, the Commission launched a debate on Europe’s ageing society, suggesting steps for higher labour market participation, including more equality between women and men and longer working lives.

In April, the Commission proposed measures to make Europe more attractive for foreign workers, including simplifying rules for non-EU nationals who live on a long-term basis in the EU. These will have to be approved by the European Parliament and the EU Council.

In the fourth quarter of this year, the Commission also plans to present a communication on dealing with ‘brain drain’ and mitigate the challenges associated with population decline in regions with low birth rates and high net emigration.

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.