Briefing Paper 35 – July 2019 Ilaria Fusacchia, Luca Salvatici and L Alan Winters Key Points Introduction Trade in value added The Baseline Modelling Brexit The effects of a ‘No deal’ Brexit Conclusion Footnotes Bibliography Online Appendix Key points The production of exports depends on value chains – between firms in one country and, through global value chains (GVCs), across international borders. Thus exports from one UK sector depend on value added from (and hence generate incomes in) other UK sectors and other countries. Trade policies and the costs of doing trade apply to the gross value of a trade flow (e.g. a tariff is levied on the whole value of an imported car). But focusing on gross value – e.g. the decline in exports of cars as the cost of exporting to the EU rises – may be misleading because it misses the effects on the sectors and other countries that supply inputs into UK cars. Even after the immediate logistical disruptions have been smoothed out, a ‘No deal’ Brexit will cut trade with the EU, and although trade with other countries, e.g. China, will increase, it will not do so by enough to make up the loss. Moreover, [...]

Briefing Paper 34 Download Briefing Paper 34 Peter Holmes, J. Brad Jensen, Emily Lydgate, Stephen Weymouth, Rorden Wilkinson, and L. Alan Winters Key points Introduction Brexit uncertainty The backstop and the issue of running two standards books Is a deal even possible? US negotiating guidelines What does USMCA foreshadow for a future US-UK trade agreement? What is the US’ likely strategic position on services? The changing market for US MNC foreign affiliate spending Conclusion Footnotes Key points Given the current political turmoil in the UK, a quick and economically significant outcome to US-UK trade negotiations seems unlikely. A great deal depends on the degree of alignment that the UK keeps with the EU on tariffs and regulations. Despite the current aggression towards the European Union, it is far from inevitable that the UK will cut its ties significantly. Aligning UK rules with those of the US, as per the US negotiating objectives, would create divergences with the EU and inevitably create extra frictions at the UK-EU border. The so-called Level Playing Field requirements, as set out in the backstop of the Withdrawal Agreement, constrain a potential UK-US agreement. The renegotiation of NAFTA into the United States-Mexico-Canada Agreement provides several insights [...]

Download Briefing Paper 31 Briefing Paper 31 – June 2019 Authors: Julia Magntorn Garrett, Minako Morita-Jaeger and L. Alan Winters Key points Introduction An Evaluation of KOREU and KORUS GATS-PLUS achievements Comparing the extent of liberalisation by sector Comparing the degree of liberalisation by mode of supply Comparing regulatory cooperation Possible options for the UK and reality checks Conclusion Footnotes Online Appendix Key Points In the early months of 2019, the UK Government’s efforts to roll-over the EU’s existing Free Trade Agreements (FTAs) were focused on the narrow issue of preparing for a ‘no-deal’ Brexit. But if the UK manages an orderly Brexit and has a transition period until the end of 2020, there would be time to do more than just rolling over these 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 modeled loosely on the Korea-US FTA (KORUS). Our comparative analysis of KorEU and KORUS reveals that the two FTAs took very different approaches to services trade liberalisation. While both achieved greater market access than Korea had committedin the GATS, KORUS seems to have achieved [...]