But with more than 500 million consumers, the EU is anything but “minute.” Its trade in goods alone dwarfs other regional trade blocs. In 2016, the North American Free Trade Agreement (NAFTA), the EU, and the Association of South-East Asian Nations (ASEAN) accounted for 58% of global trade, more than half of the world exports ($8.7 trillion), and 60% of world imports, according to the WTO (pdf). Most of this was in the EU. Regional agreements in emerging markets, like MERCOSUR (the Southern Common Market) and the Economic Community of West African States (ECOWAS), are still relatively small.
The EU has more consumers than NAFTA (484 million), but fewer than ASEAN (630 million). The sticking point for Johnson and others who share his view is that, despite which regions have the potential to increase trade the fastest (in part because they start from a lower base), proximity matters in trade. In economics, this is known as the gravity model of trade, and it’s pretty reliable. [...]
The external market for trade is more evenly split across services and goods, and for both the gravity model holds—size and distance matter. (These interactives by the UK’s statistics body make the point.) Of the world’s 50 most populous countries, the UK only exported more than £10 billion ($14 billion) in goods to three nations outside of Europe in 2016—the US, China, and Japan. (The outlier on the chart is the US.)
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