Brexit and its impact on trade between Belgium and the United Kingdom
Due to the country’s geographical proximity, the UK is one of Belgium’s most important trading partners. 3,2% of Belgium’s value added (goods and services combined) is generated by the UK’s total final demand, with the UK being Belgium’s fourth largest export destination for goods. However, the bilateral trade relationship is starkly imbalanced, as Belgium has a trade surplus in goods of €14,3 billion vis-à-vis the UK. This paper shows that this strong intertwinement leaves Belgium vulnerable to the negative economic impact of the UK’s leave vote, something already made visible by the depreciation of the Pound Sterling. While one can only hope for an as deep as possible EU-UK economic integration to be negotiated after Brexit, it is of the utmost importance for businesses and certainly SMEs, which are very important for the Belgian economy, to prepare for all scenarios, including a ‘cliff-edge’, leading to BE-UK trade under WTO-rules.