Economists have long argued, and with good justification, that international trade brings overall benefits to economies. However, increasing trade is likely to create losers as well as winners. As the UK prepares to leave the EU and have an independent trade policy it is important to understand how future trade agreements, or policy changes, may affect economic outcomes such as prices, productivity and output, and through these, individuals and regions. In this Briefing Paper, the authors provide a conceptual background of how trade changes may result in winners and losers – be these consumers, workers, regions, or industries, and give an overview of what the empirical evidence tells us about how developed economies have adjusted to changes in trade. They also consider potential policy responses that could help losers from international trade adjust, and ensure that the winners can take advantage of the new opportunities created by trade liberalisation. Read Briefing Paper 33 – WINNERS AND LOSERS FROM INTERNATIONAL TRADE: WHAT DO WE KNOW AND WHAT ARE THE IMPLICATIONS FOR POLICY? Launch and Panel Discussion at British Academy, 18 July 2019

In the case that the UK manages an orderly Brexit and has a transition period until the end of 2020, rather than just rolling over the existing agreements, what would be the possible options for future Free Trade Agreements? In the case of a future UK-Korea deal, the UK could potentially negotiate a new FTA built on the Korea-EU FTA (KorEU) or negotiate a completely new FTA modelled on the Korea-US FTA (KORUS). Our comparative analysis of KorEU and KORUS in services reveals that the two agreements took very different approaches for services trade liberalisation. Both achieved “GATS-plus” liberalisation commitments from Korea. KORUS seems to have achieved slightly more than KorEU. However, KORUS is more complicated and less transparent than KorEU. It also contains more WTO-inconsistent features. The KORUS option would enable the UK to better pursue its own specific needs since it would not be directly bound by KorEU. On the other hand, the WTO-inconsistent aspects of KORUS would need to be avoided, based on a clear vision of UK’s contribution towards the future multilateral trading system. Either way, the UK would face two stumbling blocks: the UK’s lack of negotiating power and the Most Favoured Nation (MFN) clauses [...]

This paper assesses the possible consequences of the Government’s proposed No Deal tariff regime. While there have been numerous previous assessments of the economic impact of a ‘No Deal’, the tariff proposal by the UK Government provides a new set of tariffs which have not been assessed in the existing empirical literature. In this briefing paper, the authors explain carefully the Government’s proposals and identify how much of UK trade would be affected by the changes in tariffs in a ‘No Deal’ scenario and provide an empirical assessment of the scale of the economic challenge which could face UK industries in the event of ‘No Deal’. They find that a ‘No Deal’ Brexit will pose a significant challenge to the UK economy with a negative impact on output, exports and imports driven largely by the increased cost of trading with the EU. The results highlight that in the event of ‘No Deal’ the Government’s room for policy manoeuvre is somewhat limited. Read Briefing Paper 29 – Deal or ‘No Deal’? The economic consequences of the UK’s ‘No Deal’ tariffs