Download Briefing Paper 63 Briefing Paper 63 – November 2021 Yohannes Ayele, Guillermo Larbalestier and Nicolo Tamberi Key Points Introduction UK Trade Trade in goods: TCA effects Preference Utilization Rates (PURs) Trade in services Conclusion Key points For the period January-July 2021, we estimate that the TCA has reduced goods exports to the EU by 14% and by 24% for imports from the EU. The effect on exports is mostly concentrated on a prominent decline in January 2021, while imports exhibit persistent negative effects throughout all months. The reduction in trade brought about an estimated combined hit to the UK economy of around £44 billion with £32.5 billion lost in potential imports to the UK and £11 billion in exports to the EU. Footwear & headgear, animal and vegetable oils & fats, textiles and clothing, vegetable products, ceramic and metals sectors have seen a sustained reduction in trade. For the first seven months of 2021, between 26-32% of UK exports to the EU that could have entered under a zero-tariff did not do so. Despite the zero-tariff, zero-quota trade agreement of the TCA, firms end up paying tariffs to avoid the bureaucratic costs of claiming zero tariff. The [...]

Download Briefing Paper 57 Briefing Paper 57 – May 2021 Yohannes Ayele, Guillermo Larbalestier and Nicolò Tamberi Key Points Introduction Total Trade: Exports and Imports Trade by Sectors and Industrial Categories Rules of Origin and Preference Utilization Rates Conclusion Appendix Key Points While the TCA is a tariff-free trade deal this does not mean that trade between the UK and EU is as easy as it was before. Customs formalities and paperwork are now needed and this cost for firms is likely to impact on trade. We look at the evidence for the first three months of 2021 and highlight the negative impact of UK-EU trade over this quarter. Our estimates suggest that the TCA is estimated to have reduced UK exports to the EU by 15% and imports by 32%. The impact on exports is possibly in part because of the increased customs formalities, but this applies to a much lesser extent to imports which were also affected. More work needs to be done to understand this and the extent to which this may be because of integrated supply chains, concerns by EU firms about trading with the UK, or the lowering of MFN tariffs by the [...]