Question 2 [25 marks] The following table shows data on the UK's trade balance in the first half of 2019 and the first half of 2020. The United States (US), China, Germany, the Netherlands, and France are the UK's top five trading partners. A Comprehensive Economic Partnership Agreement has been made with Japan, and Free Trade Agreement negotiations are currently underway with the US, New Zealand and Australia. Trade agreement negotiations are also still ongoing between the UK and the EU. Table 1 - UK trade balance (E million) First half of 2019 First half of 2020 Trade Partner Goods Services Total trade Goods Services Total trade balance balance balance balance balance balance United States 7114.2 19186.0 26300.2 3738.3 19505.0 23243.3 China -13607.8 1399.0 -12208.8 -13670.9 1843.0 -11827.9 Germany -15253.4 978.0 -14275.4 9208. 1 3560.0 -5648.1 Netherlands -9013.5 4208.0 4805.5 -7040.0 5150.0 -1890.0 France -3352.3 3634.0 281.8 -1631.6 1503.0 -128.6 Japan -1184.8 1197.0 12.2 -770.5 927.0 156.6 Australia 1230.9 2406.0 3636.9 1122.8 1975.0 3097.8 New Zealand -11.5 207.0 195.5 -76.1 229.0 152.9 Note: Positive numbers (+) represent UK's trade surplus; negative numbers (-) represent trade deficits. Source: Office for National Statistics - UK trade statistics 2.1 Using relevant theory and your own knowledge, explain the UK's trade patterns observed in the table above. (12 marks) 2.2 Since the start of the COVID-19 pandemic, the UK has suspended import tariffs on medical supplies (including face masks, gloves and other protective equipment). Discuss the economic consequences of this trade policy (i.e., suspending tariffs) on the UK economy. (13 marks)