When the last government talked about closing down Mickey Mouse university courses, it never occurred to me that this may include some UK business school courses. But judging by the latest paper from Aston Business School’s Centre for Business Prosperity, this university really should be on the list. I wrote about a previous Aston paper on UK agricultural exports for The Critic a few months ago. The latest paper is similar: lots of complex econometrics but zero common sense, zero knowledge of UK goods production, zero knowledge of UK trade agreements, and the authors of this paper: Aston professors, lectures and fellows: Du, Liu, Shepotylo, and Shi, don’t even understand international trade statistics.

In the first paragraph, they claim that the UK has seen only “modest economic gains from … accession to the CPTPP”. A university professor should know that the CPTPP won’t come into force until 15th December this year so it could not have produced any economic gains for the UK. But this is one of the smallest errors in the report. These professors have obviously not read or understood the UK EU Trade and Cooperation Agreement’s (TCA’s) rules of origin and do not understand how it excludes many foodstuffs, clothing, textiles and footwear from being counted as UK exports. These goods were mostly re-exports of goods grown or manufactured outside the UK or EU. Now they are counted as products of their true country of production. 

Worse still, these professors didn’t know that the HS codes for trade classification have been changed, so UK exports in 1645 goods varieties have not gone to zero but are simply now counted under different HS codes. For example: luxury motor yacht exports are now divided into three HS codes depending on the yacht’s length. The UK still exports yachts, but Aston didn’t bother to research any large and sudden changes in UK export values in an HS code. They simply claimed the UK didn’t export these goods anymore due to TCA regulations. This error alone should classify Aston’s Centre for Business Prosperity as a Mickey Mouse course. 

Other export varieties have fallen to zero because these goods are no longer counted as UK exports because they were always only re-exports of goods imported from other countries. While many of the UK’s smallest exports were always intermittent and not regularly exported so no exports in 2023 doesn’t mean there won’t be any in the future. In one or two cases, the UK has stopped manufacturing the goods due to high UK energy costs, net zero regulations or safety reasons.

I have written a full report of the mistakes in the Aston paper for Briefings for Britain. These include simple mathematical errors — for example, they claimed that 78.3 per cent of UK-manufactured cars and 70 per cent of UK-made EVs were exported to EU markets in 2022, when ITC data shows only 35 per cent of cars and 44 per cent of EVs were exported to the EU in 2022. (The ONS uses a broader SITC 7 classification of Machinery and Transport, but this also shows only 42% of exports went to the EU.) Their primary fault, though, is confusing the importance of relative changes with the importance of absolute changes. For example, they claim that the UK’s agrifood sectors were particularly hard-hit. Notably,  HS14’. For non-trade geeks, HS14 is Vegetable plaiting material and stuffing material such as bamboo, raffia, rattan, and kapok and I am sure most Brits are aware that the UK does not produce these tropical plants commercially but imports them from places like China, Sri Lanka and India. Similar mistakes are made about falls in UK exports of goods made of straw, and of cork and of cotton. 

The most fascinating thing about the Aston paper is not just its many mistakes but the way the BBC, the Guardian, the Financial Times (FT), the Independent and even CNN have miss reported the story to suit their own agendas.

The BBC’s economics editor, Faisal Islam, took one paragraph out of the report and then added some information about UK nut exports to the EU falling by 70 per cent. Most of the nuts the UK used to “export: to the EU were always re-exports of nuts imported by the UK from the US (almonds and walnuts), Vietnam (cashews), Bolivia (Brazil nuts), Turkey (pistachios), Philippines (coconuts) etc. Re-exports of goods not produced in the UK no longer count as UK exports under the rules of origin in the UK EU TCA. When this was pointed out, the BBC changed that article to one still pushing the Aston Paper but this time with some added “human interest” about a UK popcorn exporter. The BBC editor is obviously unaware that the UK doesn’t grow very much corn either, but imports over 2 million tonnes each year as well as over a million tonnes of sugar. Whether sugar-coated popcorn produced in the UK would be counted as a UK export under the TCA would depend on the source of the corn and additional ingredients and the amount of processing done in the UK. 

Incredibly, the BBC interviewed Professor Du, but didn’t recognise that her concerns about UK exports of wood and paper were misplaced. I have included a screenshot below in case the BBC takes this down as well:

But these mistakes were not just made by the BBC. The FT’s public policy editor, Peter Foster, ran the same paragraph from the Aston paper claiming UK goods exports were 27 per cent lower than where they could have been without Brexit. Foster included the claim that “the analysis reveals a heavily disrupted and weakening UK-EU supply chain post-TCA” and threw in: “The research examined the extent to which Brexit had an impact on sectors including agrifoods, wood, textiles and footwear, with larger companies in sectors such as autos and aerospace showing relatively more resilience.” If you needed evidence that Peter Foster knows nothing about UK trade and hasn’t read the TCA, this sentence surely provides it. Autos and aerospace make up about 30 per cent of UK exports so he should be pleased that these exports have been resilient. Instead, Foster is concerned about falls in Wood and Wood pulp which were worth only 0.28 per cent of the UK’s total goods exports in 2023, while Textiles were 0.5 per cent (HS50 to HS60 inclusive), and Footwear only 0.18 per cent. But undaunted by his lack of knowledge about UK trade, Foster claimed the Aston paper should fuel calls for the government to be more ambitious in improving trade ties with Brussels.

Foster asked the Resolution Foundation for a comment and perplexingly they backed up Aston’s claims that Brexit was squeezing the UK out of EU supply chains. The Resolution’s economist is quoted as saying: “What is clear is the urgent need for Labour to act quickly on their UK-EU reset strategy to prevent further deterioration and protect the UK’s economic interests”. Looks like she didn’t read the TCA rules either. Or maybe she also doesn’t know that the HS codes of many of the UK’s exports were changed in 2021. The UK has not been removed from EU supply chains. The tariff codes were changed, or the TCA rules now disallow the goods as UK exports.

The Guardian also reported on the Aston paper using almost the same headline as the FT but added: “This includes a ‘significant decline’ in consumer goods exports to the EU and corresponding UK imports, which suggests the UK is dropping out of EU value chains.” This one is laughable — consumer goods are end products and not part of a value chain and the Aston professors as well as the Guardian seem blissfully unaware that since Brexit consumer spending in the EU has been flat due to Covid, higher energy costs and higher interest rates. While consumer spending in Germany, the UK’s largest market in the EU, has been lower since Q3 2022. 

Do these journalists/economists really have no idea what the UK actually exports?

What is clear is that neither the Resolution Foundation, the BBC, the Guardian nor the Financial Times know anything about how UK trade is counted, what the UK makes or grows and what it doesn’t, and they did not recognise that the Aston paper is rubbish from the first paragraph to the last.

Do these journalists/economists really have no idea what the UK actually exports? It certainly isn’t wood or textiles or trainers. UK clothing and footwear brands moved their manufacturing to Asia in the 1990s. The UK hasn’t been the world’s major textile manufacturer for many years. As for wood — the UK has never been a major wood exporter. Even Nelson’s navy was apparently built with imported wood from North America. The UK imported wood worth £6.6 billion in 2023 and exported about 10 per cent of this amount. Both total imports and exports were roughly 20 per cent higher than before Brexit, while exports to the EU were almost 30 per cent higher, and as with so many UK exports, a third went to Ireland, as they did before Brexit. 

What is obvious about these media reports, is that none of them had bothered to read Aston’s 93-page paper. They hadn’t even read the executive summary. If they had, they would have come across Aston’s conclusions which, as well as asking for sector-specific adjustments to the TCA — although no adjustment could ever turn imported nuts, wood or bamboo into UK exports nor could it revive a disused HS code — also concluded that the UK should diversify its global sourcing, foster strategic partnerships and upgrade its ports. Bigger ports are not required for UK trade with the EU. I wonder which country the paper’s authors, Du, Liu, Shepotylo and Shi, had in mind. We should also be questioning why, with such a poor grasp of their subject, these people are teaching in a UK university.