The irreconcilability of the UK Government’s objectives for Brexit
2 March 2018
Dr Michael Gasiorek is Senior Lecturer in Economics at the University of Sussex and Director and Managing Director of InterAnalysis respectively. He is a Fellow of the UKTPO.
There is much talk about the UK not being able to “cherry-pick” and “have its cake and eat it” with regards to post-Brexit trade policy with the EU. There are a couple of issues here. First, all EU agreements are different and hence by definition bespoke. Cherries are picked by both sides. This will also be true of a future UK-EU agreement. The question, therefore, really is to do with the extent to which the EU will grant the UK a bespoke deal in serious and substantive ways. The second issue is that it is far from clear that the UK government currently knows what all the ingredients are and what the recipe is for the cake it is hoping to share with the EU. […]
Briefing Paper 18 – CAN CETA-PLUS SOLVE THE UK’S SERVICES PROBLEM?
In the search for a framework for a future UK-EU trade relationship, the Comprehensive Economic and Trade Agreement between the EU and Canada (CETA) has come under the spotlight. To inform the debate surrounding a potential ‘Canada plus’ model for the UK post-Brexit, this briefing paper provides an overview of the extent to which the EU restricts imports of services from Canada under CETA. The authors identify areas where ‘pluses’ may help to preserve existing levels of services trade between the UK and the EU post-Brexit, and discusses whether these are achievable. Further, the extent to which the EU’s commitments in CETA improve on pre-existing regimes is evaluated by comparing the degree of liberalisation in CETA with the EU’s prior commitments in the GATS.
Read Briefing Paper 18 – Can CETA-plus solve the UK’s services problem?
Briefing Paper 17 – UK–EU TRADE RELATIONS POST BREXIT: BINDING CONSTRAINTS AND IMPOSSIBLE SOLUTIONS
There is much discussion about what the UK government wants in terms of the post-transition relations between the UK and the EU, and the Labour party has now also provided a little bit more clarity on its position. However, to what extent are the different UK-EU Brexit options achievable? Dr Michael Gasiorek explores two key concerns. The first concerns the issue of the compatibility or not of the different UK-EU Brexit options, with the issue of the border between the Republic of Ireland and Northern Ireland. The second issue concerns the subtleties of the difference between being in “the” EU Customs Union, in comparison to being in “a” customs union with the EU. While it might appear a small difference, in practices the differences may be substantial.The aim of this briefing paper is to consider what difference these developments make, to examine under what circumstances might the UK governments current position on future arrangements with the EU be possible (or not), and to offer some recommendations and reflections for the way forward.
Read Briefing Paper 17 – UK–EU trade relations post Brexit: binding constraints and impossible solutions
Economists and crystal balls
23 February 2018
Dr Michael Gasiorek is Senior Lecturer in Economics at the University of Sussex and Director and Managing Director of InterAnalysis respectively. He is a Fellow of the UKTPO.
Before and since the Brexit referendum there have been numerous criticisms made of economic models, of the views of ‘experts’ and the supposed inaccuracy of their forecasts.[1] But these critiques are mostly based on misunderstandings, so, as an economist and long-time modeller, I want to explain the value – and the limitations – of modelling. Models are indeed extremely useful and should be used to help inform public policy – but you need to use them appropriately.
Myth buster: “Models are not designed to provide accurate predictions / forecasts of future reality”. […]
Will unilateral free trade be the making of Brexit?
22 February 2018
Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex, and is a Fellow of the UK Trade Policy Observatory.
This week Economists for Free Trade (EfFT) suggested that if the post-Brexit UK were to embrace unilateral free trade (UFT), the net effect of Brexit would be positive rather than negative. Earlier work on unilateral free trade has focused exclusively or largely on tariff reductions – and this latest paper has the merit of recognising that border costs and non-tariff measures (NTMs) should be brought into the analysis. Unfortunately, as Jonathan Portes and Chris Giles have observed, the EfFT assumptions are not credible.[1] […]
Sustainability Impact Assessment for post-Brexit Britain
15 February 2018
Rob Amos, Research Fellow in Law, Sussex Sustainability Research Programme, University of Sussex. Rob is conducting a project on Sustainable Trade Post-Brexit in collaboration with the UK Trade Policy Observatory.
As the UK begins to devise its independent trade policy, it is essential that any new trade agreements it negotiates are subject to Parliamentary, as well as public, oversight and scrutiny. To facilitate such oversight, the UK should undertake Sustainability Impact Assessment (SIA) for these agreements. If the UK is serious about sustainable development, it must ensure that any future trade agreements do not negatively impact the environment and communities either at home or abroad. […]
How will Brexit affect the UK’s manufacturing industry?
6 February 2018
Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex, Dr Michael Gasiorek is Senior Lecturer in Economics at the University of Sussex and Director and Managing Director of InterAnalysis, Ilona Serwicka is Research Fellow in the Economics of Brexit. All are Fellows of the UK Trade Policy Observatory (UKTPO).
How would different versions of Brexit affect the UK economy? Are some parts of the economy likely to be affected more than others? Will trade deals with the rest of the world make up for any loss of UK access to EU markets? These are highly topical questions this week as the UK Cabinet’s Brexit committee makes important decisions about its objectives in the next stage of the Brexit negotiations.
They are the questions we seek to address in our new Briefing Paper ‘Which Manufacturing Sectors are Most Vulnerable to Brexit?’, published today. As it says on the tin, we answer them only for the manufacturing sectors; and […]
Briefing Paper 16 – WHICH MANUFACTURING SECTORS ARE MOST VULNERABLE TO BREXIT?
Trade in manufactures constitutes 65% of the UK’s trade with the EU and nearly 50% of the UK’s exports of manufactures go to the EU. In this new Briefing Paper, we look at the possible effects of Brexit on UK manufacturing in much greater sectoral detail than has been done before. For 122 manufacturing sectors, we estimate the exposure of these sectors to different versions of Brexit. Our projections depend on whether we assume the UK leaves the Customs Union and the Single Market, and on whether the UK makes a free trade agreement with the EU and is able to carry over existing free trade agreements with non-EU countries. In all cases, we find that introducing tariff and non-tariff barriers raises the prices that UK consumers and producers will face, and leads to reduced UK exports; but for some sectors, the increase in protection leads to higher UK output. The impact of Brexit is likely to be significantly different between high-tech and lower-tech sectors.
Read Briefing Paper 16: Which Manufacturing Sectors Are Most Vulnerable to Brexit?
Read the online Appendix and Appendix 2 – Simulation Results
It’s not what the rules are, it’s the way that you show it: proving ‘origin’ post-Brexit
16 January 2018
Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO. Nick Jacob is a PhD Candidate in Economics at the University of Sussex.
The need for UK firms to comply with detailed Rules of Origin in a possible post-Brexit Free Trade Agreement with the EU has been widely reported. But the different procedures which firms could use to prove their compliance — and the costs to firms in time and money — have been mostly overlooked. […]
Leave-voting regions are “most exposed” to Brexit services shock
11 January 2018
Dr Ingo Borchert is Lecturer in Economics and a fellow of the UK Trade Policy Observatory. Nicolo Tamberi is a Research Assistant in Economics for the Observatory
The North East and West Midlands are the most reliant on the European market, sending around half of their services exports to the EU. Sources: Office for National Statistics (2017a); and authors’ calculations.
Two of the biggest Brexit-voting regions would be hit hardest by a potential fall in services exports upon leaving the EU, new analysis suggests. […]
