UK – Spain Economic Relations
Economic and Commercial Relations of Spain With the Region
In general terms, it should be noted that the economic relations between Spain and the United Kingdom are fluid, intense and positive for our country. The British market is an attractive market for Spanish companies from both a trade and investment point of view, and relations are intensifying at all levels.
Summary of Bilateral Relations With Spain
Since January 1, 2021, the United Kingdom has been outside the Customs Union and the Single Market of the European Union (EU) and, therefore, is a third country for all purposes. Trade with the United Kingdom (except Northern Ireland) are considered exports and imports.
However, the departure of the United Kingdom from the EU has not meant the end of bilateral cooperation, since relations between the two countries are close. During the last 10 years, exports from Spain to the United Kingdom have maintained a continuous growth path. Most of the bilateral trade is industrial in nature, with a marked intra-industrial trade character. It highlights the importance of the export of fresh fruits and vegetables. In the same way, the vast majority of large Spanish companies are installed and operate in the United Kingdom. In addition to the significant strong investment links that join Spain, the United Kingdom continues to be an attractive country for Spanish companies considering going international.
Main Bilateral Economic Agreements
The Kingdom of Spain signed on March 14, 2013 a new agreement with the United Kingdom to avoid double taxation and prevent tax evasion in matters of Income Tax and on Wealth, which repeals the one signed on October 21, 1975 The Convention and its Protocol entered into force on June 12, 2014 (BOE 05.15.2014). Information exchange agreements with Guernsey, Jersey and Isle of Man are in various stages of processing.
Exports January 2021 (Provisional Data)
In January 2021, Spanish exports of goods to the United Kingdom decreased by 23% in the interannual rate (5.8% of the total). The United Kingdom had a negative contribution (1.5 points) to the interannual variation rate of total exports due to lower sales of energy products (gas -100% and oil and derivatives -84.6%, etc.); consumer manufactures (clothing -69.4% and textiles -64.9%, essentially) and chemical products (medicines- 77% and fertilizers -73%), basically.
Spanish imports of goods from the United Kingdom in January 2021 (1.3% of the total) fell by 64.9% year-on-year, mainly due to lower purchases of energy products (oil and derivatives -94.5% and coal and electricity – 100%, among others); consumer manufactures (footwear -98.9% and toys -94.4%, among others) and food, beverages and tobacco (in addition to tobacco -100%, oils and fats -98.7% and meat products 95%, between others), fundamentally.
Trade in Services (Non-Tourist)
According to provisional data from the Balance of Payments, by destination and geographical origin, Spain exported services (non-tourism) to the United Kingdom worth 7,059 million euros in 2020, a figure that represents a year-on-year decrease of 5.9%. In the same period, imports of services (non-tourism) made by Spain from the United Kingdom amounted to 5,983 million euros, which represents an interannual fall of 9.7%.
Trade in Tourist Services
The arrival of British tourists in 2021 remains low. In the first two months of the year it has decreased by 97.7% compared to the same accumulated in 2020. The spending of the British in the accumulated January-February 2021 represents a fall of 97.2% compared to the same period of 2020.
