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. […]
Brexit will negatively affect all regions of the UK, but the North East is most vulnerable
26 March 2018
Ilona Serwicka is Research Fellow in the economics of Brexit at the UKTPO
The UK economy will be worse off after Brexit regardless of the terms of departure from the EU: this is (with a small number of exceptions) a consensus reached by previous analyses of the impact of Brexit. Anything that differs from the status quo of EU membership – ranging from a ‘soft’ Brexit that involves staying within the Customs Union and/or the Single Market to a ‘hard’ scenario of leaving the EU with no deal – will hurt growth prospects for the UK economy. […]
EU likely to reject bespoke Canada trade deal for UK
22 March 2018
Julia Magntorn is Research Assistant in Economics at the UKTPO and L. Alan Winters CB is Professor of Economics and Director of the Observatory.
The European Union is likely to reject a significantly enhanced version of its Canada trade deal for the UK after Brexit.
Our in-depth analysis of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada concludes that the EU’s commitment to the Single Market is so deeply ingrained that a substantial loosening of the rules for the UK would be politically impossible.
The EU may agree to some exceptions but these would fall far short of a bespoke deal and would be a poor substitute for the Single Market, say the report’s authors Julia Magntorn and L. Alan Winters. […]
What should Theresa May have said this week?
2 March 2018
Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex, and is a member of the UK Trade Policy Observatory.
The European Commission has this week published its controversial draft of the withdrawal treaty for the UK’s exit from the EU. The draft includes the EU’s proposal for dealing with the issue of the border in Ireland – Northern Ireland to remain in a customs union with the EU and to retain all the elements of the Single Market that support free movement of goods. […]
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. […]
