Welcome to UK Trade Policy ObservatoryRead our latest briefing papersSee recent updates on our blog page

This paper assesses the possible consequences of the Government’s proposed No Deal tariff regime. While there have been numerous previous assessments of the economic impact of a ‘No Deal’, the tariff proposal by the UK Government provides a new set of tariffs which have not been assessed in the existing empirical literature. In this briefing paper, the authors explain carefully the Government’s proposals and identify how much of UK trade would be affected by the changes in tariffs in a ‘No Deal’ scenario and provide an empirical assessment of the scale of the economic challenge which could face UK industries in the event of ‘No Deal’. They find that a ‘No Deal’ Brexit will pose a significant challenge to the UK economy with a negative impact on output, exports and imports driven largely by the increased cost of trading with the EU. The results highlight that in the event of ‘No Deal’ the Government’s room for policy manoeuvre is somewhat limited. Read Briefing Paper 29 – Deal or ‘No Deal’? The economic consequences of the UK’s ‘No Deal’ tariffs

Investor-State Dispute Settlement (ISDS) mechanisms have been globally criticised as out-dated and inappropriate fora for the settlement of disputes involving States. Attempted reform is underway at the United Nations Commission on International Trade Law (UNCITRAL) Working Group III, at which the EU is a key player. The role of the EU as a significant moderniser of trade agreements will have implications for the UK in negotiating any future trade deals with the EU. For example, the consequences of the recent Opinion 1/17 on the legality of a new form of court system to handle investor-state disputes in the EU-Canada Agreement (CETA) are significant in analysing how the CJEU was persuaded to reach the conclusion that new judicial fora in international Treaties may be compatible with EU law. The litigation around the modern trade agreements of the EU is a warning signal that conducting trade agreements from scratch with the EU is not painless, with ratification potentially being very prolonged when there are challenges to the agreement at the national and EU level. Read Briefing Paper 30 – Opinion 1/17: Towards A Modern EU Approach to Investor-State Dispute Settlement

In the case that the UK manages an orderly Brexit and has a transition period until the end of 2020, rather than just rolling over the existing agreements, what would be the possible options for future Free Trade Agreements? In the case of a future UK-Korea deal, the UK could potentially negotiate a new FTA built on the Korea-EU FTA (KorEU) or negotiate a completely new FTA modelled on the Korea-US FTA (KORUS). Our comparative analysis of KorEU and KORUS in services reveals that the two agreements took very different approaches for services trade liberalisation. Both achieved “GATS-plus” liberalisation commitments from Korea. KORUS seems to have achieved slightly more than KorEU. However, KORUS is more complicated and less transparent than KorEU. It also contains more WTO-inconsistent features. The KORUS option would enable the UK to better pursue its own specific needs since it would not be directly bound by KorEU. On the other hand, the WTO-inconsistent aspects of KORUS would need to be avoided, based on a clear vision of UK’s contribution towards the future multilateral trading system. Either way, the UK would face two stumbling blocks: the UK’s lack of negotiating power and the Most Favoured Nation (MFN) clauses [...]