Download Briefing Paper 75 Briefing Paper 75 – July 2023 Guillermo Larbalestier, Minako Morita-Jaeger, Nicolò Tamberi, and Manuel Tong Koecklin Key points Introduction Assessing the economic potential from the CPTPP Further policy considerations Political and institutional dilemmas that can arise from expansion Conclusion Key points: Accession to the CPTPP will not lead to substantial economic gains for the UK. Any such gains will largely depend on possible future expansion of the CTPPP, primarily should China ever accede, and to a lesser extent Taiwan, Costa Rica, Ecuador and Uruguay who have also applied to join. The UK’s current engagement in CPTPP supply chains is limited especially when compared to its relations with the EU and the US. However, further expansion of the CPTPP could create possibilities for the UK to strengthen supply chains with acceding CPTPP countries. In part this arises from a set of standardised CPTPP ‘rules of origin’ across all members. However, for some products, these are more restrictive than the UK has with those countries through recently signed bilateral agreements. Product-specific analysis is required to understand which products could benefit from the CPTPP ROOs arrangements. China’s accession into the CPTPP seems highly unlikely both on geopolitical [...]

Download Briefing Paper 74 Briefing Paper 74 – April 2023 Mattia Di Ubaldo, Guillermo Larbalestier and Manuel Tong Koecklin Key Points Introduction No more conditions, deeper preferences and less uncertainty Who will really benefit from the changes in the Enhanced DCTS access criteria? More favourable rules of origin for LDCs Conclusion Key Points Non-reciprocal trade preferences are a policy tool that can promote export-led growth in developing countries. In the UK, the current scheme – the Generalised Scheme of Preferences (GSP) – will be replaced by the Developing Countries Trading Scheme (DCTS) in 2023. The new DCTS introduces minimal changes to the preferential tariff schedules across the three sub-schemes. Instead, there are changes in the eligibility criteria for countries to access the more preferential Enhanced Preferences sub-scheme; and changes in the rules of origin (RoOs) enabling use of the preferences under the Comprehensive Preferences sub-scheme offered to Least Developed Countries (LDCs). Potential duty savings for countries moving from the GSP General Framework to the DCTS Enhanced Preferences are very small, as these countries do not trade much in products benefiting from GSP or DCTS preferences. However, the new system offers greater certainty which can contribute to growth and [...]

Download Briefing Paper 71 Briefing Paper 71 - December 2022 Michael Gasiorek, Guillermo Larbalestier and Alasdair Smith Key Points What is a sensitive sector? Introduction How to identify sensitive and strategic industries? Making use of the indicators Conclusions and future directions Key points Policy discussions about the effects and opportunities of international trade recognise that some parts of the economy might be more sensitive than others to changes in trade and/or trade policy, but the concept of a sensitive industry has different meanings. There is no single correct way to identify whether sectors are sensitive to import competition, or offer strategic export opportunities, so a range of indicators must be modelled to identify sensitive and strategic industries. Our highlights include: the largest low-wage sectors are in services, with little exposure to international trade many of the manufacturing sectors which score highly on several indicators of sensitivity (clothing, leather, textiles, wood) are small the large food manufacturing sector has a very high level of protection from import competition the sectors identified as having strategic export potential typically have high wages, high levels of R&D expenditure, high exports, and low SME presence, but otherwise are quite diverse What is a [...]

Briefing Paper 69 – September 2022 Download Briefing Paper 69 Peter Holmes, Anna Jerzewska and Guillermo Larbalestier Key Points Introduction Freeports and Duty Drawback Prohibition in FTAs Freeports and Origin Freeports and Subsidies How has this been addressed in other agreements? Conclusions Key Points This paper discusses some of the obstacles that goods from UK Freeports may face when exported to countries with which the UK has a preferential trading relationship. Many of the UK’s Free Trade Agreements (FTAs) contain provisions that deny preferential access to goods which, during their manufacturing process, benefited from duty drawback, i.e. the refund of – or exemption from – customs duty on imported inputs. The originating status of goods produced in free ports may be affected by rules going beyond direct provisions in FTAs. The origin of a good produced in a free port may be affected by the customs legislation of a trading partner. The tax incentives offered by the UK Freeports may be perceived by an importing partner as unfair export subsidies. Counter measures against subsidies may be taken under provisions in the FTAs, World Trade Organization (WTO) rules, or unilaterally. FTA agreements around the world treat free ports differently. [...]