Grandfathering Free Trade Agreements and Rules of Origin: What might appear bilateral is in fact trilateral!
27 September 2017
Dr Peter Holmes Reader in Economics and Dr Michael Gasiorek is Senior Lecturer in Economics at the University of Sussex and Director and Managing Director of InterAnalysis respectively. Both are Fellows of the UKTPO.
With respect to the post-Brexit period, the UK needs to sort out its trade relationships not just with the EU but also with non-EU countries. In regard to the EU, Mrs May’s stated objective is for an “implementation” period during which “access to one another’s markets should continue on current terms”, such that “businesses and public services should only have to plan for one set of changes in the relationship between the UK and the EU”. However, for this to be possible, the UK will also have to deal with the relationship with non-EU countries. In this blog, we focus on an important aspect of Free Trade Agreements (FTA) which centres around something which is a bit technical and often not well understood – called “Rules of Origin” (RoOs).[1] […]
Transition Made Easy
26 September 2017,
L. Alan Winters CB, Professor of Economics and Director of UKTPO. Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO, Erika Szyszczak is a Professor of Law at the University of Sussex, independent ADR Mediator and a Fellow of the UKTPO.
Now it’s official. More than a year after the UKTPO said that it would be necessary (see Briefing Paper 2 and NIER paper), the Prime Minister has announced that the UK wants a transitional deal that preserves the status quo. Namely, membership of the Single market, a customs union with the EU, free mobility of labour, jurisdiction of the Court of Justice of the European Union (CJEU), budget payments and no external trade deals. Sad to say, this seems like progress.
Despite the language and some of the press commentary, Britain is not ‘opting for’, still less ‘agreeing to’, a transitional deal; it is asking for one in the negotiations. The Florence speech still uses the language of an ‘implementation period’. This […]
The EU Regulatory Magnet: What Are the Consequences for the UK?
1st September 2017
Erika Szyszczak is a Professor of Law at the University of Sussex, independent ADR Mediator and a Fellow of the UKTPO.
This week it was reported that the PM, Theresa May intends to “cut and paste” existing EU trade deals when forging a new trade policy for the UK.
Today the EU-Ukraine Association Agreement (AA) officially came into force, although most of the provisions of the AA have been provisionally applied since 1 September 2014, with the trade provisions contained in the novel Deep and Comprehensive Free Trade Area (DCFTA), provisionally applied since 1 January 2016. The AA is a new model of external relations for the EU and it addresses matters beyond trade (cooperation in foreign and security policy, justice, freedom and security (including migration) taxation, public finance management, science and technology, education and information society). It is an innovative form of external action in offering a new type of economic integration without membership of the EU: an integration-oriented agreement. The new AA may reveal some lessons for the UK as it seeks new models of trade relationships. Indeed, the AA has already entered the consciousness of the
Government proposals on goods trade only cover first few weeks after Brexit
23 August 2017
Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO
The government’s new paper “Continuity in the availability of goods for the EU and the UK – a position paper“ acknowledges the problems that will be created by a hard Brexit in which there is a disruption in the systems for verifying compliance with mandatory standards.
The problem is that its substantive proposals deal with only the most immediate disruptions in the sale of goods that are already in the supply chain at the moment of Brexit. The official description acknowledges this: “This paper outlines the UK’s position on continuity in the availability of goods in UK and EU markets at the point of EU exit” (my italics).
Yet, the key requirement for the British economy is that there needs to be a permanent system in place for ensuring that UK product inspection systems are recognised by the EU for goods made after Brexit. […]
The economic benefits of Brexit – revisited and rectified
21 August 2017
L. Alan Winters CB, Professor of Economics and Director of UKTPO.
Economists for Free Trade (EfFT) are back, offering the Introduction to an unpublished – and hence unknown – report that claims £135 billion benefits from Brexit. It not only repeats the previous claim that GDP will increase by 4% if the UK adopts free trade, which I characterised as ‘doubly misleading’ in April, but it adds in an extra 2% from ‘improved regulation’, 0.6% from our net budget contribution to the EU and 0.2% from removing the ‘subsidy to unskilled immigration’. It also promises faster growth as well.
I’ll come back to free trade, but, first, what regulations will be improved? We are not told. Similarly, what subsidy to immigration? Who knows? The budget contribution to the EU may be saved, but we will need to spend much of it on providing replacements for various EU regulatory bodies such as the European Medicines Agency, on negotiating new deals on things like airlines or nuclear isotopes, supporting farmers (which EfFT apparently accepts), on customs formalities on trade with the EU, on managing alleged unfair trade and on […]
The UK’s plan for post-Brexit customs is more hopeful than realistic
16 August 2017
Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO
The UK government has just issued its official position paper on the issue of the customs union and Brexit. It emphasises a desire for the “most frictionless trade possible in goods between the UK and the EU” and proposes two ways of achieving this in the long term, while making it clear that the UK will leave the EU’s customs union when it leaves the EU.
The first option it proposes is a “streamlined customs arrangement” which sounds like a form of free trade agreement (but there is no mention of this as an aim). It involves keeping in place a number of the existing customs arrangements and using (untested) electronic technology to ensure the smooth processing of all documentation. The stated aim is to keep border arrangements as close as possible to what they are now to maintain continuity for businesses. […]
The Customs Union: The Fiction of ‘Frictionless’ Trade
14 August 2017
After Brexit, the UK will have to leave the EU Customs Union (CU) and become a legally separate customs territory. It might then, however, seek to create a new Customs Union with the EU to cover their mutual trade.
The UK Trade Policy Observatory at the University of Sussex (UKTPO) has produced this short animated video that explains what this entails, and what kind of an agreement the UK and the EU would need to establish in order to achieve the same level of trade costs as we have now.
Ultimately, the video explains, a Customs Union will not produce ‘frictionless’ trade without re-creating several aspects of current EU membership. With Brexit negotiations already underway, it emphasises that maintaining a customs union is just one part of the story; and not, by itself, the be all and end all for achieving a smooth trading process.
Republishing guidelines
The UK Trade Policy Observatory believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement. For online use, this should be a link to he original resource on the our website. We do not however, publish under a Creative Commons license. This means you CANNOT republish our articles online or in […]
UK government’s approach to trade policy towards developing countries needs further development
27 June 2017
Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO
The UK government’s new approach to trade policy towards developing countries has just been released in a DFID document that has been widely commented on. The government’s proposals are welcome, but yet they are not quite as generous as they may seem.
A Bloomberg piece says, optimistically: “The government promises improved access to U.K. markets for the world’s poorest countries”. However the only concrete promise is that
“ around 48 countries across the globe, from Bangladesh to Sierra Leone, Haiti and Ethiopia will continue to benefit from duty-free exports into the UK on all goods other than arms and ammunition, known as ‘everything but arms.”
In other words, the UK pledges to maintain existing arrangements for the poorest countries currently benefiting from the EU’s Everything but Arms deal (EBA). This amounts to simply maintaining the status quo for this group and is not actually an improvement.
The EU referendum – one year on, and back at square one?
23 June 2017
L. Alan Winters CB, Professor of Economics and Director of UKTPO and Ilona Serwicka, Research Fellow at UKTPO
One year ago the British people voted to leave the EU. Out of 33.5 million votes cast, 51.9 per cent were for ‘leave’, albeit in the absence of any statement about what ‘leaving’ might mean. The government is still vague about what the UK’s post-Brexit trade policy should be – even after triggering the formal leave process – but the general election has pressured Theresa May to soften her Brexit stance. Even though Brexit negotiations are now formally under way, the options suddenly again seem wide open for debate.
In terms of options the UK is back at square one, but following a year’s analysis, it is now clearer what these options amount to. Over the year, the UK Trade Policy Observatory (UKTPO) has discussed many of the options and this note draws on some of that analysis to try to light the path forward. […]
Brexit: hard truths and hard choices
19 June 2017
Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex, and is a member of the UK Trade Policy Observatory.
It’s now 12 months since the referendum decision, 3 months since the Article 50 notification, and only 21 months until the date on which the UK is due to exit the EU. Brexit negotiations start today, but most politicians have still not progressed beyond the stage of wishful thinking.
There are ambiguities about the objectives of both the large political parties but each seems to want some kind of free trade agreement (FTA) with the EU after Brexit, often described by a phrase like ‘tariff-free access to the single market’. Behind such inherently confused terminology lies an apparent wish to have a ‘deep’ FTA; that is to say, a UK-EU FTA which has no tariffs and sufficient regulatory convergence between the UK and the EU that many of the non-tariff advantages of the single market are retained.
Here’s the first hard truth: a deep UK-EU FTA cannot be negotiated in 21 months. Even much weaker agreements take longer, especially if the political and […]
