In 2008, the total value of UK trade, including imports and exports of both goods and services, was almost £900 billion.

This gave the UK a 4.4% share of global trade, and put us in fifth position (behind the US, Germany, China, and Japan).

Irrespective of trends in exchange rates and the ups and downs of our own and the world economy, trade continues to become increasingly important to the UK.

This can be illustrated by growth in the total flow of trade in relation to growth of the entire economy.

For most of the 1990s and the early 2000s, the value of the UK’s trade expanded faster than overall GDP (punctuated by periods of slower trade growth particularly in 2002-2003 and 2007-2008, reflecting periods when the world economy slowed markedly). In 2008, exports represented 27% of GDP, and imports 30%.

Source: ONS

The fact that the UK's trade is growing faster than GDP means is that our economy, in common with others, is becoming more open. Over time, it is getting easier for businesses in other countries to supply goods and services to buyers in Britain, and vice versa.

This trend, which has been a feature of the post-1945 environment, is not just a consequence of improved transport links and more sophisticated banking and communications services, but has been actively promoted by coordinated international action to liberalise trade.

The creation of a single market in the EU, and the various rounds of global trade negotiations have been important milestones.

TABLE 17.1: WORLD TRADE FLOWS, 2007 ($bn)