WTO reform: Plurilateral Agreements
13 January 2022
L. Alan Winters is Professor of Economics and Founding Director of UK Trade Policy Observatory and Bernard Hoekman is Professor of Global Economics, European University Institute and Fellow of the UK Trade Policy Observatory
It is widely accepted that international economic relations depend upon a smoothly functioning multilateral trading system. That trading system, institutionally underpinned by the World Trade Organization (WTO), can both stimulate economic activity and help to promote international cooperation in spheres such as climate change and migration. However, the WTO is becoming less relevant to a world in which services account for a growing share of trade, interest in environmental regulation (notably on CO2 emissions) is growing, and digital technology is reshaping our lives.
These issues impinge directly on international trade and thus fall within the broad remit of international rulemaking in the WTO. However, decision making in the WTO typically requires consensus from all the Members, which is difficult to achieve when Members have different ideas about what the appropriate rules for dealing with such challenges are. Thus, not only has it become difficult for countries […]
China and the WTO
10 December 2021
Michael Gasiorek is Professor of Economics and Director of the UK Trade Policy Observatory at the University of Sussex and L. Alan Winters is Professor of Economics and Founding Director of UKTPO
China acceded to the World Trade Organisation twenty years ago. Yet despite being a member of the international trading club for two decades, China’s ‘role’ in the trading system continues to generate controversy across a range of areas such as the alleged support to state-owned enterprises boosting their international competitiveness, restrictions on foreign direct investment in China and the ineffective intellectual property protection in China. In addition, and sometimes conflated with trade, there are technology-related security concerns and human rights abuses, notably with regard to the Uyghurs. The Covid-19 pandemic has also raised worries in some quarters about the vulnerability of supply chains, including over-reliance on particular suppliers such as China in critical sectors. […]
Briefing Paper 65 DEEPENING AND MANAGING TRANSATLANTIC ECONOMIC RELATIONSHIPS
In this Briefing Paper, the authors review the importance of the UK-US trade relationship and identify clear interests for closer economic cooperation. They discuss the main challenges for trade discussions and suggest that bilateral cooperation – primarily in ad hoc regulatory areas – has potential, but there is a lack of interest on the US side. Finally, they look at broader economic issues and systematic policy issues, such as climate change, and multilateral economic relations where the UK hopes to cooperate with the US.
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Briefing Paper 64 – UK POLICY ON CARBON LEAKAGE
The idea of introducing a Border Carbon Adjustment has been raised by various countries and major trading partners of the UK, most notably the EU, with its Carbon Border Adjustment Mechanism. This Briefing Paper seeks to address the possible implications of a border carbon adjustment mechanism for the UK. We examine the potential impact on specific industries and consider implications of cooperation with the EU on ETS schemes and BCAs, the pros and cons to the UK of applying such a new type of policy tool and for maintaining trade, investment and job stability in the UK, and with trading partners, and the extent to which it might counter the problem of carbon leakage.
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The UK’s new trade deals – what should happen before they are signed?
26 November 2021
Chloe Anthony is an ESRC-funded doctoral researcher in environmental law at the University of Sussex Law School. Minako Morita-Jaeger is a Policy Research Fellow of the UK Trade Policy Observatory and a Senior Research Fellow of the University of Sussex Business School. L. Alan Winters is Professor of Economics and Founding Director of UKTPO.
Trade deals primarily aim to facilitate trade between countries by lowering barriers to trade in both goods and services. Many of these barriers are increasingly concerned with different regulations across countries and also with so-called ‘non-trade policy areas’ such as labour or environmental standards. The UK’s most recent FTAs – for example, the UK-EU Trade and Cooperation Agreement, the UK-Japan Comprehensive Economic Partnership – aim for cooperation beyond trade.
The domestic impacts of trade deals – economic, social and environmental – can be significant, so it is important that UK trade deals are scrutinised domestically before they are signed. For example, trade agreements with larger partners, such as the EU or the US, may have […]
The UK’s new Trade Agreements: Curb your Enthusiasm
8 November 2021
L. Alan Winters is Professor of Economics and Founding Director of the UKTP0 and Guillermo Larbalestier is Research Assistant in International Trade at the University of Sussex and Fellow of the UKTPO.
Key Findings:
- To date, the UK government has signed no new trade agreements relative to what it would have had as a continuing member of the EU.
- The Government estimates that the two agreements in principle announced this year (Australia and New Zealand) will increase UK Gross Domestic Product by between £200 and £500 million annually – that is, 0.01% to 0.02% (one to two ten-thousandths) of GDP or between £3 and £7 per head of population – and that only after they have bedded down over 15 years or so .
We were asked to sum up the economic benefits of the UK’s new post-Brexit trade agreements. Our first observation is that if we take as a starting point the trade agreements that the UK would have been party to as a member of the EU, the government has, to date, signed no new trade agreements!
Briefing Paper 63 – POST-BREXIT: TRADE IN GOODS AND SERVICES (II)
Since the UK-EU Trade and Cooperation Agreement (TCA) came into force, firms trading with the EU have faced new costs as they learn to trade under new regulations and comply with customs formalities that were otherwise not present. In this Briefing Paper, we provide an analysis of UK monthly trade data to assess how UK goods trade has performed in the period January-July 2021. We also expand our analysis on preference utilization rates (PURs), which depict the extent to which UK exports to the EU have benefited from the tariff-free treatment agreed in the TCA as well as examining the impact of the TCA on trade in services in the first two quarters of 2021. Our analysis shows that the introduction of the TCA reduced trade between the UK and the EU, but this is not homogenous across sectors, although, whilst exports took a knock in January and have since recovered, the impact on imports has persisted. Furthermore, 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 foregone duty saving amounts to £534.6 million.
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A sprat over nothing?
29 October 2021
Michael Gasiorek is Professor of Economics and Director of the UK Trade Policy Observatory at the University of Sussex.
The impounding of a UK fishing boat by the French authorities on Thursday is symptomatic of the tensions in the wider political relationship between the UK and France, which goes beyond the implementation of the fisheries part of the Trade and Cooperation Agreement (TCA) with the EU. It is also symptomatic of the political importance of the fisheries sector on both sides of the Channel. Brexit was about ‘taking back control’, and with regard to fishing, for the UK Government, that meant taking back control of UK waters. The actual agreement, however, fell far short of what the fisheries industry had hoped for. […]
The economics and politics of China’s accession to the CPTPP
7 October 2021
Minako Morita-Jaeger is a Policy Research Fellow of the UK Trade Policy Observatory and a Senior Research Fellow of the University of Sussex Business School. Guillermo Larbalestier is Research Assistant in International Trade at the University of Sussex and Fellow of the UKTPO.
Complex geopolitical landscape
Trade policy concerns, national security and defence are increasingly intertwined in the Indo-Pacific region. This is partly driven by geo-political strategic interests and Sino-US rivalry in the Asia-Pacific region, and partly by the shifting economic balance of power towards the region. China formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 16 September, one day after Australia, UK and the US announced the creation of the new security partnership: Australia-UK-US (AUKUS). This should also be seen in the context of the Biden administration’s China containment strategy and an absence of US leadership in trade policy since the Trump era due to a greater focus on domestic priorities. China is thus trying to use the CPTPP as a tool in the geo-political power game in the Asia-Pacific region. By joining the […]
Briefing Paper 62 – THE IMPACT OF A NEW CUSTOMS AND REGULATORY BORDER WITH THE EU FOR UK COMPANIES TRADING GOODS
Leaving the EU has led to the creation of a new customs and regulatory border between the UK and the EU making it more difficult and more expensive to trade with the EU. However, the impact of Brexit on UK importers and exporters is not homogenous. This Briefing Paper identifies the factors and considerations that determine which companies are impacted, and thus why some might choose to cease to trade, while others experience no change in their trade with the EU. As more border formalities and checks are introduced, UK importers are yet to feel the full scale of the impact. As a result, issues are only going to become more widespread and deepen and new ways of responding and dealing with them are still to emerge.
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