The UK Regional Trade in Goods Statistics (RTS)
29 July 2021
Yohannes Ayele is Research Fellow in the Economics of Brexit at the University of Sussex and Fellow of the UKTPO.
Since 1 January 2021, the UK’s trading relationship with its biggest and closest trading partner—the EU—has been governed by the Trade and Cooperation Agreement (TCA). Although the TCA is a zero-tariff and quota-free trade deal, several reports indicate that it is having a negative impact on the UK’s trade with the EU (see, 1, 2, and 3). While looking at the aggregate effect of the TCA on the UK trade is important, such analysis also misses the substantial differential impact of the TCA across the UK’s devolved administrations and regions.
Regions in the same country can be affected differently by new trade barriers because of the difference in industrial production structure and, second, the differential exposure of industries to trade policy changes. In this blog, we provide a brief report on how the UK’s regional trade with the EU fared in the first quarter since the introduction of the TCA. […]
Tariff-free trade with the EU: not so PUR and simple
29 July 2021
Yohannes Ayele is Research Fellow in the Economics of Brexit at the University of Sussex and Fellow of the UKTPO.
Since 1 January 2021, the UK’s trading relationship with its biggest and closest trading partner—the EU—has been governed by the Trade and Cooperation Agreement (TCA). Under the TCA, UK exports to the EU face zero-tariff and zero-quota. However, to claim zero tariffs, exporters must meet the rules of origin requirements and be able to provide proof of origin. Where exporters do not meet the requirements they end up paying the tariff. Even those exporters that can meet the rules of origin requirement, because of the cost of the paperwork and requirements for proof of origin needed to claim the zero tariff, they may instead choose to pay the tariff. The latter is more likely where the tariff preference margin (i.e., the difference between MFN non-zero tariff and the zero-tariff under TCA) is very low. These problems— the rules of origin requirements and costs associated to claim zero-tariff—could be particularly challenging for smaller companies. Therefore, in practice, firms may end up paying tariffs despite the zero-tariff and zero-quota deal under the TCA. […]
UK-EU trade and the TCA update: results up to April 2021
23 July 2021
Nicolo Tamberi is Research Officer in Economics at the University of Sussex and a fellow of the UKTPO.
We have updated our estimates of the effects of the introduction of the Trade and Cooperation Agreement (TCA) on UK-EU trade in 2021 through to April. The methodology used was described in the UKTPO briefing paper 57 (see the appendix for details). We find that over the period January-April 2021, the TCA reduced UK exports to the EU by 18.7% and imports from the EU by 25.8% compared to the scenario in which the UK did not leave the EU. […]
Honesty is such a lonely word…
22 July 2021
Michael Gasiorek is Professor of Economics and Director of the UK Trade Policy Observatory (UKTPO) at the University of Sussex. L. Alan Winters is Professor of Economics and Founding Director of the UKTPO.
The UK Government’s command paper on Northern Ireland published yesterday (21 July 2021) is significant in four regards.
First, because it explicitly recognises – at length – that the Protocol is not working (at least not for the UK) and needs to be modified in form or in implementation. This is almost certainly correct. […]
Safeguard tariff rate quotas on steel imports: The Computor says ‘no’, but the Government says ‘yes’
8 July 2021
L. Alan Winters is Professor of Economics and Founding Director of the UKTPO. Guillermo Larbalestier is Research Assistant in International Trade at the University of Sussex and Fellow of the UKTPO.
On 1st June 2021, as part of its post-Brexit trade architecture, the UK Government launched the Trade Remedies Authority (TRA). On 11th June the TRA recommended the extension of only some of the quotas and tariffs on steel imports that the UK had inherited from the EU. On 30th June, one day before these measures were due to expire, the Government rejected the TRA’s recommendation and extended the policies on several categories of steel for which the TRA had recommended the revocation. It also announced a review to check whether the TRA was ‘fit for purpose’. What was going on? And does it matter?
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Briefing Paper 61 – ACCESSING CPTPP WITHOUT A NATIONAL DIGITAL REGULATORY STRATEGY? HARD POLICY CHALLENGES FOR THE UK
The UK’s accession negotiation to the Asia-Pacific Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade deal was formally launched in June. This Briefing Paper aims to examine the implications that joining the CPTPP would have for the UK’s regulatory strategy and what kind of impact it could have for future trade negotiations. To examine these issues, we look at the digital trade provisions in recent trade agreements between the UK and the EU, Japan and Australia.
Read Briefing Paper 61: ACCESSING CPTPP WITHOUT A NATIONAL DIGITAL REGULATORY STRATEGY? HARD POLICY CHALLENGES FOR THE UK
Briefing Paper 60 – CPTPP AND AGRI-FOOD REGULATION: CROSSING THE EU-EXIT RUBICON?
The influence of trade agreements in shaping UK food safety and standards has become almost existential in defining the UK’s post-EU identity. Acceding to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is far from ideology-free: it symbolises the UK’s desire for regulatory independence from the EU and sets out a new post-Brexit direction. In this Briefing Paper, we look whether CPTPP accession seems likely to lower UK food standards and prevent the UK from agreeing to continued regulatory alignment with the EU. The answer is, not necessarily, if the UK Government communicates clearly and explicitly to CPTPP parties its intent to maintain its current regulatory approach, preferably through the use of so-called side letters.
Read Briefing Paper 60: CPTPP AND AGRI-FOOD REGULATION: CROSSING THE EU-EXIT RUBICON?
UK-Australia FTA – Elbow bumps and all
16 June 2021
Michael Gasiorek is Professor of Economics and Director of the UK Trade Policy Observatory at the University of Sussex. Guillermo Larbalestier is Research Assistant in International Trade at the University of Sussex and Fellow of the UKTPO.
Indications of a trade deal between the UK and Australia first surfaced soon after the Brexit referendum. This week it was announced that the two nations had agreed on the broad terms of the deal. The news was accompanied by images of PM Boris Johnson and his Australian counterpart, Scott Morrison, bumping elbows (the new handshake, if you will) and exchanging chocolate bars over baskets of British and Australian products.
The deal has significance for several reasons. First, it is the first trade deal outside the EU that was designed from scratch. So far, UK trade agreements with other non-EU countries have been “continuity agreements” that were almost entirely based on pre-existing deals between the EU and the other nations (we include UK-Japan as de facto in this category). Secondly, it signifies the UK’s continued commitment to liberalising and opening trade, […]
Briefing Paper 59 – G7 LEADERS SHOULD DISCUSS INTERNATIONAL TRADE (SERIOUSLY)
International trade in a digital world is increasingly influenced by domestic regulation and is linked to non-trade areas such as health or climate change. This makes it difficult for the WTO’s consensus- and trade-focused structure to make swift progress. This Briefing Paper looks at how the G7 leadership across all four Trade Tracks could provide the necessary impetus for multilateral or open plurilateral solutions, in order to avert further fragmentation of the trading system.
Read Briefing Paper 59: G7 LEADERS SHOULD DISCUSS INTERNATIONAL TRADE (SERIOUSLY)
Briefing Paper 58 – TCA DISPUTE RESOLUTION MECHANISMS AND SUBSIDY CONTROL COMMITMENTS
The Trade and Cooperation Agreement sets a new precedent for bilateral trade agreements by incorporating a set of so-called “level playing field” commitments that seek to maintain the Parties’ regulatory convergence in certain policy areas but without prohibiting their respective sovereign right to choose future regulatory divergence. Instead, continued convergence is encouraged by the inclusion of robust dispute resolution mechanisms, which provide for the possibility of either Party taking unilateral trade defence measures in certain circumstances. This Briefing Paper, by Dr Totis Kotsonis of Pinsent Masons LLP, looks at subsidy control, which forms a key part of the level playing field commitments in detail, describing the dispute resolution mechanisms that are available and analysing the effectiveness of the unilateral trade defence measures for which the TCA provides in this context. For reasons which are discussed in the paper, the author concludes that UK subsidies might be more prone to challenges than EU State Aid and that whilst the TCA inter-Party consultation provisions might prove crucial in limiting the risk of inter-Party disputes arising, further development of the UK domestic control subsidy system is required to make it more robust and less prone to challenges.
Read Briefing Paper 58: TCA DISPUTE RESOLUTION MECHANISMS AND […]
