Single Market

Would Canada-plus do the trick?

26 September 2018 L. Alan Winters CB is Professor of Economics and Director of the UK Trade Policy Observatory and Nicolo Tamberi is a Research Assistant in Economics for the Observatory The brusque dismissal of elements of Mrs May’s Chequers plan at the informal meeting in Salzburg last week has stimulated feverish attempts to revive the case for a deep and special UK-EU Free Trade Agreement (FTA), under the title of a CETA-plus agreement. This effort received substantial reinforcement from the Institute for Economic Affairs’ paper of 24 September 2018. None of the discussion, however, has dealt seriously with the fact that an FTA will require the introduction of border formalities on UK-EU trade and that these will both violate the commitment to the absence of a border in Ireland and create serious congestion at those ports dealing with UK-EU flows, which will increase trading costs and cut trade with the EU. […]

By L. Alan Winters, Nicolò Tamberi|2025-07-18T13:41:19+01:0026 September 2018|UK- EU|4 Comments

Does the ‘Facilitated Customs Arrangement’ comply with WTO rules?

19 September 2018 Dr Emily Lydgate is a lecturer in Law at the University of Sussex and a fellow of the UK Trade Policy Observatory. In its Chequers White Paper, the UK government has proposed that, in order to facilitate a frictionless border, it will operate a dual customs regime known as a Facilitated Customs Arrangement (‘FCA’). By replacing rules of origin checks at the EU-UK border with internal monitoring, the FCA requires firms to establish ‘robustly’ the destination of their products to ensure that correct duties have been applied, and then, if they wish, to seek rebates if they have been overcharged. Past UKTPO blogs have addressed logistical challenges and strategic downsides of this ‘Fantastically Complicated Alternative’ (see also Does the Chequers Agreement provide any steps to Brexit heaven?) But would it be compatible with the rules of the World Trade Organization? The precise details of the FCA’s operation remain unclear. Barring a dispute, it’s not possible to settle the question definitively, but the FCA does prima facie pose a risk of WTO non-compliance. We presume that the UK government has undertaken some analysis of this, and that it covers (at least) the following issues. […]

By Emily Lydgate|2025-07-18T13:41:43+01:0019 September 2018|UK- EU|1 Comment

Trading on ‘WTO Rules’ is NOT the best option: the treachery of growth rates

7 August 2018 Nicolo Tamberi is a Research Officer in Economics for the UK Trade Policy Observatory. In a recent post on Brexit Central , Michael Burrage examines the growth of different countries’ exports to the EU12 over 1993-2015 and asks: ‘How can trading with the EU under WTO rules be the worst possible option when the exports to the EU of 15 countries which have been doing just that over 23 years of the Single Market have grown four times as much as those of the UK, despite all the tariff and non-tariff barriers they have faced?’ The answer is ‘easily’! […]

By Nicolò Tamberi|2025-07-18T13:42:09+01:007 August 2018|UK- EU|4 Comments

Does the Chequers Agreement provide any steps to Brexit heaven?

9 July 2018 Dr Michael Gasiorek is Senior Lecturer in Economics at the University of Sussex and Managing Director of InterAnalysis. He is a Fellow of the UKTPO. In good part, the answer depends on the extent to which this agreement moves on from the Government’s previous position, is feasible, is credible, and is acceptable to the EU. It also depends on whether it will be acceptable to the Conservative party, which the resignations of David Davis and Boris Johnson throw into serious doubt. In this blog, I focus on one aspect of this – the extent to which the “facilitated customs arrangement” (FCA), which is central to the agreement notionally reached at Chequers, is substantively different from the previous idea of a “New Customs Partnership” (NCP). […]

By Michael Gasiorek|2025-07-18T13:46:35+01:0010 July 2018|UK- EU|0 Comments

New economic partnership between the UK and Japan – Does rolling over the EU-Japan EPA make sense?

06 July 2018 Dr. Minako Morita-Jaeger is is an international trade policy consultant and a Visiting Fellow of the UK Trade Policy Observatory Exactly a year ago today, the EU and Japan agreed the EU-Japan Economic Partnership Agreement (EPA) in principle. Subsequently, at the end of August that year, the UK Prime Minister Theresa May and the Japanese Prime Minister Shinzo Abe agreed to work quickly to establish a new bilateral economic partnership based on the final terms of the EU-Japan EPA when the UK exits the EU. The UK Government currently wishes to roll over existing EU trade agreements, including the EU-Japan EPA. But does rolling over make sense? From the UK point of view, it is obvious that rolling over the Agreement reflects neither Brexit campaigners’ promise of building a ‘Global Britain’ nor UK sovereignty of its own trade policy. From the Japanese perspective, rolling over the EU-Japan EPA does not make sense either because a symbolic arrangement cannot reflect economic realities. […]

By Minako Morita-Jaeger|2025-07-18T13:47:21+01:006 July 2018|UK - Non EU|5 Comments

What about the remaining 80 percent – services? The ‘Customs Union’ and ‘Unilateral Free Trade’ share the same flaw

05 July 2018 L. Alan Winters CB is Professor of Economics and Director of the Observatory. Two years in and the Cabinet is still squabbling over the UK’s trade relationship with Europe. Among the options most discussed, if not most likely to occur, are The Jersey option – arrangements to provide conditions equivalent to the customs union and the Single Market in goods; Mrs May’s ‘third way’ customs partnership – where the UK collects EU-level tariffs at the border and rebates them only if UK tariffs are lower and firms can prove that the goods did not leave the UK. Until the UK can convince the EU that the technology to do the latter will actually prevent the leakage of lower-taxed goods into the EU, this is effectively the ‘customs union’; and Unilateral free trade – ‘no deal’ followed by the immediate abolition of all UK tariffs. This blog does not assess the relative merits of these arrangements, but notes that they share a common flaw: they ignore 80 percent of the British economy! The more successful 80 percent, in fact – the services sectors, in which the UK has a manifest comparative advantage (see below). The advocates of these [...]

By L. Alan Winters|2025-07-18T13:48:03+01:006 July 2018|UK- EU|8 Comments

The return of the Norway option?

18 May 2018 Julia Magntorn is Research Officer in Economics at the UKTPO. While Theresa May and her cabinet are trying to agree on whether to back the maximum facilitation proposal or the customs partnership, another option, nicknamed the ‘Norway option’ which would see the UK remaining a member of the European Economic Area (EEA), has made a comeback in the Brexit debate. […]

By Julia Magntorn Garrett|2025-07-18T13:50:22+01:0018 May 2018|UK- EU|3 Comments

Why the Customs Partnership is problematic

17 May 2018 Dr Michael Gasiorek is Senior Lecturer in Economics and Dr Peter Holmes is Reader in Economics at the University of Sussex. They are both Fellows of the UKTPO and Managing Director and Director of InterAnalysis respectively. The government’s two preferred options for post-Brexit trade with the EU are “Maximum Facilitation” whereby technological solutions are used to simplify trade procedures, and a so-called “New Customs Partnership”. This blog discusses the implications of the New Customs Partnership (NCP) scheme. It must be borne in mind that the EU has so far rejected both and that in fact the degree of detail currently provided by the Government on either is so slight that we cannot be sure what is proposed. It is also arguable that they are not alternatives since under any scenario the government is keen to ensure the maximum simplification of procedures in order for trade to be ‘as frictionless as possible’. Even if they were viable, both the NCP and the Max Fac proposals involve significant trade-offs – namely that they involve firms in expensive set-up costs in order to be able to reduce transactions costs. […]

By Michael Gasiorek, Peter Holmes|2025-07-18T13:50:48+01:0017 May 2018|UK- EU|2 Comments

A Customs Union with the EU: A giant step politically but a small step for the economy

1 May 2018 Ilona Serwicka is Research Fellow in the economics of Brexit and Charlotte Humma is the Business Manager at the UKTPO. As the European Union (EU) Withdrawal Bill and the Trade Bill progress through parliament, forming a customs union with the EU has become a key issue. On 18 April 2018, the House of Lords voted to keep open the option of staying in a Customs Union after Brexit, promptly followed by the UK Government reaffirming its intention neither to remain in the EU Customs Union nor to seek to form a new one. So where does this leave us? […]

By Nick Phipps|2018-05-01T08:43:32+01:001 May 2018|UK- EU|8 Comments

What can the UK learn from existing customs unions?

29 March 2018 Dr Ingo Borchert is Senior Lecturer in Economics and a fellow of the UK Trade Policy Observatory and Julia Magntorn is Research Assistant in Economics at the Observatory. With one year to go until the UK will leave the European Union (EU), sorting out Britain’s trade relation with the EU is the most important task. Yet the design of the future UK-EU agreement has implications for trade policy towards non-EU countries. On account of this, the British Prime Minister in her Mansion House speech ruled out forming a new customs union with the EU because this “would not be compatible with a meaningful independent trade policy.” Indeed, having sovereignty over its external trade policy post-Brexit has been at the forefront of the UK’s negotiation agenda, and consequently, the provision in the current draft Withdrawal Agreement that the UK may commence Free Trade Agreement (FTA) negotiations with other countries during the transition period was perceived as an important concession won. […]

By Ingo Borchert, Julia Magntorn Garrett|2025-07-18T13:54:04+01:0029 March 2018|UK - Non EU, UK- EU|3 Comments

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