Economic realities of Brexit for firms and people in Northern Ireland
14 October 2019
Michael Gasiorek is Professor of Economics at the University of Sussex and a Fellow of the UK Trade Policy Observatory.
With the current state of negotiations between the UK and the EU it is easy to see why attention is focussed on the politics of a possible agreement. The contentious issue is, of course, that of the Irish border. However, the focus on the politics means that there has been little discussion of the economic impacts and specifically of the vulnerability of the Northern Irish economy to the decisions being made. […]
Johnson’s Brexit proposal is riddled with problems
03 October 2019
L. Alan Winters CB is Professor of Economics and Director of the Observatory.
At last, a chink of clarity. Yesterday’s proposal for the treatment of the Irish economy admits, more or less for the first time officially, that there are trade-offs to Brexit. Suddenly the laws of political physics are restored. You cannot both have your cake and eat it.
The trade-off that has at last dawned on Boris Johnson is that if you want the whole of the UK to choose its own tariffs on goods, a customs border in Ireland is inevitable. And if you want Britain to be able to set its own regulations, then you need a border in the Irish Sea. […]
Briefing Paper 36 – HAPPY CENTENNIAL BIRTHDAY UKEF: FIT FOR THE FUTURE?
Since the 2016 Brexit Referendum, the strategic importance of increasing UK exports to outside of the EU has been heightened in the pursuit of new sources of future national growth. With this aim, the UK Government has put renewed priority on developing the UK’s export credit agency (UKEF) as a vital component of its new export strategy. Yet securing new export opportunities to support is increasingly challenging in the current trading environment of global export stagnation. Furthermore, although export credit support is seen as the fuel that powers the international trading system, in competing for overseas contracts there is a potential for governments to use public resources to provide unfair subsidies to exporting firms in the form of export financing.
This Briefing Paper examines the export credit support options open to UKEF, with specific reference to its international legal obligations under the OECD and the WTO. Leaving the EU will not change the UK’s obligations under either, but the UK Government will make and defend its position towards official export credit support as a single country, rather than within a bloc. The paper examines the rationale for official export credit support, and the rationale for regulating any such public support, then […]
Free ports—preparing to trade post-Brexit
26 September 2019
Dr Peter Holmes is Reader in Economics at the University of Sussex, Director of Interanalysis and Fellow of the UK Trade Policy Observatory. Interview by Kate Beaumont. This article was first published on Lexis®PSL Commercial on 5 September 2019.
How will the establishment of free ports enable the UK to benefit from Brexit trade opportunities? Dr Peter Holmes, reader in economics at the University of Sussex, considers the pros and cons of these special ports where normal tax and customs rules do not apply. […]
UK food safety Statutory Instruments: A problem for US-UK negotiations?
12 September 2019
Chloe Anthony and Dr Emily Lydgate – lecturer in Law at the University of Sussex and a fellow of the UK Trade Policy Observatory.
The US remains top of the list of post-Brexit UK trade negotiations, with Boris Johnson recently putting a quick US deal as a first priority. The US’s strongly-worded negotiating objectives include loosening EU ‘non-science-based’ bans or restrictions on Genetically Modified Organisms (GMOs), pesticides, food additives, hormone-enhanced meat, in addition to the infamous chlorinated chicken. As former international trade secretary Liam Fox conceded, a US-UK Free Trade Agreement (FTA) that excludes food and agriculture is a non-starter from the US perspective. […]
Mimicking President Trump? – Trade and Politics in Japan’s Recent Export Measure
5 September 2019
Guest blog by Professor Yong-Shik Lee is Director and Professorial Fellow of the Law and Development Institute and Hiram H. Lesar Distinguished Visiting Professor in Law, Southern Illinois University School of Law.
In the last eighteen months, President Trump has re-introduced the use of national security arguments to restrict the USA’s international trade for commercial reasons. I recently warned[1] that the US use of security arguments to justify its additional tariffs on steel and aluminum imports would create a dangerous precedent, and shortly after that, another major trading nation has indeed followed this precedent. […]
Johnson’s alternative to the backstop would be just as ‘undemocratic’
27 August 2019
Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex and is a member of the UK Trade Policy Observatory
The adjective ‘undemocratic’ has for a few weeks now been mysteriously attached to the Ireland backstop provision in the Withdrawal Agreement. The prime minister’s letter of August 19th to Donald Tusk, president of the EU Council, at least explained why: the backstop is said to be undemocratic because it binds the UK after Brexit into EU trade and regulatory policies in which it will have no say.
This is not a new idea. From early on in the Brexit debates, many economists assumed there would be compelling economic incentives for a post-Brexit UK to remain in the European Economic Area (EEA). Alan Winters pointed out that this would mean the UK would have to pay (financial contributions to the EU) and obey (EU rules) but with no say (in setting the rules). The Irish backstop is not the same as the […]
Briefing Paper 35 – BREXIT AND GLOBAL VALUE CHAINS: ‘NO-DEAL’ IS STILL COSTLY
A great deal of attention has been devoted to the consequences of different forms of post-Brexit trade policy for UK exports. But focusing on the gross value of UK exports – e.g. the decline in exports of completed cars as the cost of exporting to the EU rises – is only part of the story because it misses the effects on the sectors and other countries that supply inputs into UK goods. In this Briefing Paper, the authors unpack value chains to identify which sectors and countries create the value that is embodied in UK flows of exports and imports, and hence to identify how the changes in trade induced by a ‘No deal’ Brexit will affect the value contributed (i.e. the incomes generated) by different sectors and countries.
Studying only the effects of ‘No deal’ on the costs of conducting goods trade, but following them throughout the British economy, the authors find that ‘No deal’ could reduce UK GDP by 4% relative to remain. Moreover, because of the decline in incomes and the fact that services are key inputs into manufactured exports, the incomes generated in services sectors would also be around 4% smaller.
Read Briefing Paper 35 – BREXIT AND GLOBAL […]
A look at new UK pesticides regulation: Part 2
16 July 2019
Chloe Anthony, Ffion Thomas, and Dr Emily Lydgate – lecturer in Law at the University of Sussex and a fellow of the UK Trade Policy Observatory.
In May we published a blog analysing the EU Exit statutory instruments (SIs) on pesticides prepared under the EU Withdrawal Act 2018. One of the key concerns that we raised was that EU restrictions on pesticides with endocrine disrupting properties had been deleted. After this omission was identified, DEFRA responded very swiftly, clarifying that the deletion had been accidental and releasing a new Statutory Instrument (SI). […]
Hiccups that make us reel
15 July 2019
Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex and Julia Magntorn Garrett is a Research Officer in Economics at the University of Sussex. Both are Fellows of the UK Trade Policy Observatory.
A favourite band (of at least one of the authors of this blog) from the 1980s was the Cocteau Twins (See, or rather listen to…Sugar Hiccup) – well-known for the dreamy unintelligibility of their lyrics. Which of course leads to the dreamy unintelligibility of some of the promises being made around Brexit. Supporters of Brexit have argued that the UK need not be overly concerned with a ‘No deal’ Brexit. This ranges from positions that ‘No deal’ would not be “as frightening as people think” although there would be “some hiccups in the first year” (David Davies), and that although there may be “some disruption” Britain would “survive and prosper without a deal” (Jeremy Hunt), to arguments that the idea that ‘No deal’ would have a negative impact were “a fantasy of fevered minds” (Jacob Rees Mogg).
