A Scotland Office online campaign to highlight Scotland’s trade with the rest of the UK cost £47,395.65, a Freedom of Information (FOI) request by Discourse.scot and others reveals. The majority—£38,892.33—was spent on Facebook, while £4,483.36 and £4,019.96 went to Google and Twitter respectively.
The activity, funded by the Cabinet Office on behalf of the UK Government, promoted the fact that the rest of the UK is the primary market for Scotland’s exports of goods and services. The campaign included pay-per-click Google advertisements appearing above search results, and a video on Twitter, both highlighting official Scottish Government export statistics.
The Scotland Office said in their FOI response that “[r]esearch shows many people do not understand the importance of the trading relationship between Scotland and the rest of the UK—which is worth four times that of trade with the European Union, and supports four times as many Scottish jobs. This campaign addresses that, informing the public and encouraging Scottish businesses to take full advantage of our biggest, barrier-free market.” They add that “[t]he UK Government has a responsibility to ensure the public are equipped with the facts.”
What are the facts? The Scottish Government estimates that in 2015 Scotland exported 63% of goods and services to rUK, 12% to the EU, and 21% to the rest of the world1. In exporting such a large proportion to one partner, Scotland is an outlier in the EU2. However, Canada exports even more than Scotland does to its biggest market—the United States—and has done for decades. In 2015, it exported 77% of goods and 55% of services to the USA. In 2000 the services figure was even higher, at 61%3. Similarly, in 2015 southern neighbour Mexico exported 81% of goods to the USA.
Scotland, Canada, and Mexico’s trading situations can be explained at least in part by the fact that each country is geographically adjoined to a relatively huge market. The authors of a recent London School of Economics report—Economists for Brexit: A Critique—note that “…trade is affected by the distance between countries, their size, history and wealth (the ‘gravity relationship’).”4
For a small economy like Scotland, however, there is a strong argument to be made for diversifying exports, since relying on one market is a source of risk. That’s what New Zealand and Ireland5 did. Both were once heavily reliant on the UK market.
In the meantime, though, not even the Scotland Office is suggesting that trade with rUK will cease in the event of independence. Indeed, rUK is estimated to export more to Scotland in absolute terms than Scotland does to rUK. Reducing friction at the border with England would be in everyone’s interests.
It should perhaps also be noted that at the same time as buying online advertising to highlight Scotland’s trading position, the present UK Government is advocating withdrawing from its biggest market—the EU single market—into which the UK exported 43.6% of goods and services in 20156.
- Source: Export Statistics Scotland 2015.
- In terms of goods, for example, most EU and OECD countries export between about 10% and 30% to their top export partner. Source: World Bank.
- Source: UN Comtrade Database.
- For more information, see Head and Mayer: Gravity Equations: Workhorse, Toolkit, and Cookbook, figures 1 and 2.
- In 1962 Ireland exported 75% of its goods to the UK. Over the proceeding decades it gradually diversified and now only exports 12% here.
- Source: Dataset—9. Geographical breakdown of the current account, The Pink Book: 2016.