UK- EU

Not Backing Britain: Brexit vote has reduced foreign direct investment to the UK by 19 per cent

31 October 2018 Ilona Serwicka, Research Fellow in the economics of Brexit at the UKTPO and Nicolo Tamberi, Research Assistant in Economics for the Observatory. Our latest research finds that overseas investment to the UK may be some 19 per cent lower because of the vote to leave the EU. Despite a buoyant 12 months for the world economy in 2017, inflows of Foreign Direct Investment (FDI) to the UK have continued to decline since reaching a peak in 2015. […]

By Nick Phipps|2018-11-01T07:56:30+00:001 November 2018|UK - Non EU, UK- EU|5 Comments

Here’s another nice mess you’ve gotten us into

17 October 2018 Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex and a fellow of the UK Trade Policy Observatory. UK-EU negotiations are in a mess. There appears to be a genuine impasse, where the stumbling block is the issue of no border in Ireland. The EU has indicated it is for the UK to make a better offer, while the UK is arguing that the EU needs to be more reasonable. Both are right, if they want to avoid ‘no deal’. […]

By Nick Phipps|2018-10-17T16:24:55+01:0017 October 2018|UK- EU|5 Comments

Goods In – Services Out: Can the UK Walk on One Leg?

01 October 2018 Dr Ingo Borchert is Senior Lecturer in Economics, and Dr Peter Holmes is a Reader in Economics, both are fellows of the UK Trade Policy Observatory. The UK Government is currently proposing to the EU, broadly speaking, to adopt a common rulebook for goods. By contrast, not much if anything is sought in the realm of services, let alone movement of people or other areas of the Single Market. Part of the EU’s response has been that goods and services are so interlinked that one cannot have a goods only single market. Is this response just posturing as part of the negotiations process, or are there real issues with separating goods and services? […]

By Nick Phipps|2018-10-01T11:47:59+01:001 October 2018|UK- EU|1 Comment

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 Nick Phipps|2018-09-26T08:46:14+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 Nick Phipps|2018-09-19T16:15:50+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 Nick Phipps|2018-08-07T16:21:06+01:007 August 2018|UK- EU|4 Comments

“Mamma Mia – here we go again” Equivalence for goods regulation in the Chequers proposal

3 August 2018 Dr Emily Lydgate is a lecturer in Law, Dr Peter Holmes is a reader in Economics and Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex. They are all fellows of the UK Trade Policy Observatory. In describing the future regulatory relationship between the EU and UK, the recent UK White Paper proposes the notion of ‘equivalence’ in some areas. This may seem like a mere technical requirement, but equivalence is a loaded word in trade policy circles, and the UK government’s reliance on it bears further scrutiny. With respect to goods, ‘equivalence’ shows up in two main ways. First, the UK states that it will maintain equivalence (rather than exact harmonisation with EU regulation) for some food policy rules in the context of a […]

By Nick Phipps|2018-08-03T13:25:04+01:003 August 2018|UK- EU|6 Comments

Tilting the playing field? The asymmetry in the UK and EU’s regulatory ‘ask’

27 July 2018 Dr Emily Lydgate is a lecturer in Law at the University of Sussex and a fellow of the UK Trade Policy Observatory. The July UK White Paper on the future relationship with the EU calls for a ‘common rule-book’ for goods. This has sometimes been shorthanded as a proposal for a Single Market for goods (in contrast to services, which departs more dramatically from the status quo).[1] But the scope of regulation the UK proposes should fall within this ‘common rulebook’ is narrower than what would be covered in a Single Market for goods – as the EEA Agreement demonstrates. It’s narrower even than that covered by the EU-Ukraine DCFTA Agreement. So what does the common rule-book cover – and how might this match up with the EU’s regulatory ‘ask’ of the UK? […]

By Nick Phipps|2018-07-27T14:54:22+01:0027 July 2018|UK- EU|1 Comment

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 Nick Phipps|2018-07-10T09:59:42+01:0010 July 2018|UK- EU|0 Comments

Weasel words in the Chequers Statement

9 July 2018 L. Alan Winters CB is Professor of Economics and Director of the Observatory. The (three page) Chequers Statement is a remarkable political sticking plaster. Coupled with some robust politics it appeared to have kept the Cabinet unified for a few more days, although now even that goal has been missed. This note is not about the politics, but about the technical aspects of the Statement which is replete with ambiguities and wishful thinking (or worse). The White Paper, if it arrives on time, may resolve some of these ambiguities, but that is far from clear, given the political imperatives that Mrs May feels must guide her actions. […]

By Nick Phipps|2018-07-09T14:18:39+01:009 July 2018|UK- EU|4 Comments