Fuelled by banking, whisky and oil, an independent Scotland would export goods and services worth almost £100bn, putting it among the top 35 exporters in the world, according to new data that could bolster the economic case for independence.
The trade data were released by the Scottish government on Wednesday, just as Mark Carney, Bank of England governor, was highlighting the strong economic links between Scotland and the rest of the UK and the potential fiscal and monetary complexities that independence would bring.
The estimate of Scotland’s 2012 exports lays out in stark terms the strength of Scotland’s economic ties with the UK. It shows that £47.6bn of a total £73.6bn in non-oil exports of goods and services, and almost half of its oil and gas exports were to the rest of the UK.
Mr Carney warned in his speech that the “high degree of integration between Scotland and the rest of the UK may in part depend on their being part of the same sovereign nation” and that the emergence of borders after independence could affect that.
But the numbers could also bolster the economic case for Scottish independence by offering a picture of a mature and independent trading nation that, while heavily reliant on oil and gas, would also be a vibrant exporter of other goods and services to the world.
“Scotland could be perfectly viable,” said Gavin McCrone, a former chief economic adviser to the Scottish government and author of the book Scottish Independence: Weighing Up the Economics.
The data, in the Scottish government’s annual Global Connections Survey, were scheduled for release long before Mr Carney’s speech was announced.
They estimate the value of Scotland’s 2012 non-oil exports of goods and services to the rest of the UK and the world at £73.6bn. A Scottish government spokesman said on Wednesday that it estimated oil and gas exports that year at £24.4bn.
Taken together those numbers put Scotland’s total 2012 exports at £98bn, making it the 34th biggest exporter in the world, just behind Denmark and ahead of the Czech Republic, oil-rich Qatar and emerging market darlings such as Nigeria and Vietnam.
There are still questions over what an independent Scotland’s total trade position would be. The Scottish government does not publish a comparable estimate for imports. How to split oil and gas revenues is also likely to be one of the most contentious elements of any post-referendum negotiations. It therefore remains difficult to assess just what Scotland’s oil and gas exports would be.
But based on survey responses from more than 2,000 companies in Scotland, the picture offered of the rest of the economy is far more concrete. It shows financial services accounted for £11.2bn of Scottish exports in 2012, making it by far the biggest single industry. Close behind with £8.7bn in exports in 2012 were food, beverages, and tobacco, of which the whisky industry accounted for £4.6bn.
The logistics of how an independent Scotland would trade with the rest of the UK – and the world – and whether independence would affect trade would depend on many different factors, said Mr McCrone.
Monetary union would ease trade and so too would both countries remaining members of the EU. According to the data, £11.7bn, or 45 per cent, of Scotland’s £26bn in exports beyond the UK went to EU member states in 2012.
But the future of a post-independence monetary union and both the UK and an independent Scotland’s EU membership remain open questions that will have to be dealt with in the future.
In his speech Mr Carney cited past economic research that had showed a “border effect” on trade between the US and Canada and in other parts of the world. Yet just what would happen to trade at the Scottish-English border post-independence is unclear, Mr McCrone said.
More certain is the likelihood that independence would come with some immediate “disruption” to trade should it happen. But with time – and negotiations – it would inevitably settle down, he said.
“It would be a bumpy ride to begin with and in the long term it would depend on how sensible government policies would be,” Mr McCrone said.
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