Download this Briefing Paper Briefing Paper 50 – December 2020 Minako Morita Jaeger and Yohannes Ayele Keypoints Introduction Trade and Investment overview Trade in goods Trade in services Digital and data Investment Conclusion Footnotes Key points Evaluating the UK-Japan Comprehensive Economic Partnership Agreement (CEPA) is important as it will become a benchmark for the UK’s future Free Trade Agreement (FTA). CEPA largely replicates the EU-Japan Economic Partnership Agreement (JEEPA) except for some developments in areas such as e-commerce, and moderate developments in rules of origin and regulatory cooperation in financial services. The developments with regard to e-commerce provisions are a highlight of CEPA. The provisions go further than the e-commerce provisions in JEEPA as well as beyond the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in some areas. However, such changes in approach are also likely to have broader social implications. CEPA failed to make any significant advances in areas, such as investment, the movement of natural persons, and audio-visual services. For the UK’s future FTAs, it is important that the government establishes clearer policy positions, including with regard to regulatory alignment with the EU, on a number of issues and their treatment under FTAs. Deep FTAs [...]

Download this Briefing Paper Briefing Paper 44 – July 2020 Yohannes Ayele and L. Alan Winters Key Points Introduction What has happened since 2016? Effect of Exchange Rate Changes on Prices and on Trade Quantities On consumer prices Global Value Chains Entry and Exit in Export Markets Understanding the UK Economy’s Response to the Brexit depreciation Conclusion Appendix and references Key Points The effects of exchange rate changes on prices and trade are difficult to predict with confidence. However, empirical results suggest that when a country depreciates its currency, import prices are likely to rise significantly, but by a smaller percentage than the depreciation. The extent to which these import price rises affect the cost of living and the cost of local production depends on the shares of consumption and inputs that are imported. Developed country exporters pass a relatively large portion of a depreciation onto importers of those products, the proportion being slightly smaller for more sophisticated goods and the more efficient exporters in a sector, and larger when the imported inputs account for a large share of production costs. The UK’s relatively heavy involvement in international value chains helps to explain why the June-2016 depreciation of [...]