Trade in goods and services and the single market – why does it matter?
Trade in goods and services is one of the key mechanisms fostering competition, consumer choice and the efficient allocation of resources in the single market.
This section measures the level of integration of trade in goods and services in the single market by looking at indicators at both national and EU levels.
Performance indicators at national level
EU trade integration in goods (levels)
The chart shows the percentage of a country’s gross domestic product (GDP) represented by EU trade in goods with other EU countries (average of imports and exports). It reveals how deeply most EU countries’ economies are integrated into the EU economy.
Source: Eurostat, balance of payments by country - annual data (BPM6) [bop_c6_a]. Last update: 26 September 2023.
EU trade integration in goods (change)
The chart shows the percentage change in EU trade integration in goods (average value of imports and exports as a share of GDP) between 2020 and 2022. It reveals that the integration of EU countries’ economies into the EU economy is progressing, albeit slowly.
Source: Eurostat, balance of payments by country - annual data (BPM6) [bop_c6_a]. Last update: 26 September 2023.
EU trade integration in services (levels)
The chart shows the percentage of a country’s GDP represented by EU trade in services (excluding financial and transport services) with other EU countries (average of imports and exports). These shares range from 2 to 50%. The chart also confirms that the integration of EU countries’ economies in services is much less advanced compared with goods, even though services make up a much larger part of GDP.
Source: Eurostat, balance of payments by country - annual data (BPM6) [bop_c6_a]. Last update: 26 September 2023.
EU trade integration in services (change)
The chart shows the percentage change in EU trade integration for services (excluding financial and transport) measured as the average value of imports and exports as a proportion of GDP. Between 2020 and 2022, these shares increased for all EU countries with available data, except Denmark, Ireland and the Netherlands.
Source: Eurostat, balance of payments by country - annual data (BPM6) [bop_c6_a]. Last update: 26 September 2023.
SMEs in the industrial sector with exports of goods to other EU countries
This indicator measures the share of SMEs reporting dispatches of goods to other EU countries, based on value added tax (VAT) data. The share is calculated by dividing the number of exporting SMEs (nominator) by the total number of SMEs (denominator).
Higher shares mean that a bigger number of SMEs have the ability to trade across borders. As these values are based on VAT data, they are at the conservative end and are likely to underestimate the real share of exporting SMEs.
In 2020, 15.48% of SMEs in the EU’s industrial sector exported goods to other EU countries. On average, this share fell between 2017 and 2020 (by 7.93%), reflecting the downturn in exports in 2020 during the COVID-19 pandemic.
Data only cover the industrial sector, i.e. NACE codes B, C, D and E.
Micro-enterprises are included. VAT data are used to estimate the number of traders and the trade value of the smallest traders, which are exempted from Intrastat reporting. These traders account for a limited share of trade value – at most 3 % of the total value of exports within the EU and 7% of the total value of imports within the EU – but represent the majority in terms of number of businesses.
No 2020 data available for Malta, and no growth rates are available for Cyprus and Malta because 2017 data are missing.
Exports of goods to other EU countries by SMEs in the industrial sector (% of SMEs)
Source: Eurostat, trade in goods by enterprise characteristics, and Eurostat, structural business statistics, 2020 data.
Performance indicators at EU level
Trends in trade within the EU and with the rest of the world
This indicator measures single market integration by the development of trade within the EU and with the rest of the world over time. Trade is defined as the average between imports and exports. Data are in nominal values and monthly.
Integration in the single market and in the rest of the world: trade over GDP
The chart below shows the trend in the EU’s trade flows in goods and services within the EU and with the rest of the world as a share of total EU GDP between 1993 and 2022.
The vertical lines highlight breaks in the time series due to changes in the number of countries in the single market. Trade is measured by the average of imports and exports.
For both goods and services, trade integration in the EU has more than doubled in the past three decades. In 1993, trade integration in goods for the 12 EU countries in the single market at the time stood at 11.4% of the EU’s GDP. This gradually increased to 26.3% in 2022 for today’s 27 EU countries. During the same period, trade integration in services grew from 2.9% to 7.5%.
EU trade with the rest of the world has overall increased in the past three decades. While in 1993 trade in goods for the 12 Member States composing the Single Market at the time stood at 8.4% of the bloc's GDP, it has gradually increased to 17.6% in 2022 for today’s EU-27. During the same period, trade in services went from 2.8% to 7.7%.
The single market is the EU’s main source of trade in goods. It is about 60% higher than the EU’s trade in goods with the rest of the world. Trade in services within the EU remains broadly at the same level as EU trade in services with the rest of the world, which is about 7.5% of GDP.
Source: Eurostat [bop_c6_a, bop_its_deth, bop_its_det, bop_its6_det, COMEXT]
Integration in the single market and in the rest of the world: international comparisons
This chart shows trade flows in goods and services of several economic areas, within their own area and with the rest of the world, as a share of their respective GDP.
It is calculated using 2022 goods data from the Comtrade database and 2021 services data from the World Trade Organization (WTO). Due to a lack of data for Laos and Vietnam, 2021 goods data are used. There are also no data for internal USA trade in services. Trade is measured by the average of imports and exports.
Apart from the USA’s internal market for goods, the EU can be considered to be much more integrated in both goods and services than the other economic areas, whose main source of trade is outside their own area.
Sources: Eurostat, World Bank World Development Indicators, UN Comtrade, US Freight Analysis Network, WTO Balanced International Trade in Services
Price convergence
The first chart shows the coefficient of variation of prices (in purchasing power parity GDP) for the EU. This is an indicator of price dispersion across Member States.
The second chart shows the average growth rate of the coefficient.
The chart reveals another side of the EU economy’s integration: the significant decrease in price divergence since the 1990s, which continues to fall. This decrease is the expected result of further market integration. The coefficient of variation has dropped from approximately 45% to 25% in the course of a generation.
Price convergence: general trend
Source: Eurostat
Price convergence: average growth rates
Source: Eurostat