Brexit

‘No deal’ means ‘no deal’

03 July 2019 L. Alan Winters CB is Professor of Economics and Director of the Observatory. Last week I was challenged twice for using the term ‘no deal’. There is no such thing, I was told, because, even if the UK does not ratify the Withdrawal Agreement of 25th November 2018, there will still be plenty of deals. At the time I thought, for several reasons, that this was wrong in substance if not literally, but more recently I have concluded that it is also dangerous. Like we saw in the referendum campaign, it undermines informed debate by deliberately confusing the terminology. ‘The deal’ is an agreement between the EU and the UK ‘setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union’ (Article 50 – Treaty on European Union). ‘No deal’ is the absence of such a deal. For business and the economy, ‘no deal’ has come to mean the absence of a trade agreement under which the UK and the EU trade with each other on terms better than those provided for under the World Trade Organization. The former ‘no deal’ implies the latter – as I argue below [...]

By Nick Phipps|2019-07-03T08:22:33+01:003 July 2019|UK- EU|5 Comments

The Writing on the Wall: FDI Inflows and Brexit

28 June 2019 Nicolo Tamberi is a Research Assistant in Economics for the UK Trade Policy Observatory. Dr Ingo Borchert is Senior Lecturer in Economics at the University of Sussex and a fellow of the Observatory. On Wednesday, the Department for International Trade (DIT) released its official statistics on inward foreign direct investments (FDI) for the financial year 2018-19.[1] As stated by the DIT, these data measure the inflow of ‘new investment, expansion, and mergers & acquisition’ projects, both publicly announced and not. […]

By Nick Phipps|2019-06-28T17:01:03+01:0028 June 2019|UK - Non EU, UK- EU|1 Comment

Dispute Resolution in EU Trade Agreements: A Preliminary Glimpse of a New World Order

26 June 2019 Erika Szyszczak is a Research Professor in Law at the University of Sussex and a Fellow of UKTPO The Dispute Mechanism Systems (DMS) in many trade agreements have lain dormant because countries preferred to use the World Trade Organization (WTO), with its Appellate mechanisms, as the forum to resolve international disputes. This may change in the coming years as the confidence in, and reliability of the WTO, is slowly paralysed by the disruptive attitude of the United States. One question that emerges is whether the use of EU dispute resolution mechanisms offer a faster and clearer approach towards dispute resolution and might serve as a model for future regional trade treaties. […]

By Nick Phipps|2019-06-26T11:44:49+01:0026 June 2019|UK- EU|1 Comment

The vulnerability of different parliamentary constituencies to Brexit economic shocks

10 December 2018 L. Alan Winters CB, Professor of Economics and Director of the UK Trade Policy Observatory and Ilona Serwicka is Research Fellow in the economics of Brexit at the Observatory. Today we are publishing a study of the economic impact of ‘no deal’ and ‘soft’ Brexit scenarios on the 632 Parliamentary constituencies in Great Britain. It shows that calculating the effect of Brexit on the residents in an area gives a very different perspective from the more common calculation based on the jobs in that area. For example, a ‘no deal’ Brexit would imply a shock equivalent to losing some 42,400 jobs in the parliamentary constituency of Cities of London and Westminster. However, 41,250 of these jobs are held by people who live elsewhere. At the other extreme, Streatham may suffer a loss equivalent to 650 of its jobs, but around 2,250 of Streatham’s residents would lose their employment. […]

By Nick Phipps|2018-12-10T14:57:15+00:0010 December 2018|UK- EU|6 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

A New Model for EU Trade Agreements: Trade Only, Association/Economic Partnership Agreements … and … Investment Agreements

Trouble Ahead for post-Brexit Trade with the UK? 24 May 2018 Professor Erika Szyszczak is a Professor of Law at the University of Sussex and is a member of the UK Trade Policy Observatory. If, and when the UK is able to agree a new trade relationship with the EU it will be negotiating within a new EU approach to conducting trade agreements. This will have consequences for the type of agreement(s) the UK is able to negotiate with the EU, as well as the replication of any trade agreements negotiated by the EU and the rest of the world before the full Brexit process is finalised. […]

By Nick Phipps|2018-05-24T11:50:12+01:0024 May 2018|UK- EU|0 Comments

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”. […]

By Nick Phipps|2018-02-23T10:26:24+00:0023 February 2018|UK - Non EU, UK- EU|1 Comment

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 in doing so we take a very disaggregated approach to UK manufacturing. […]

By Nick Phipps|2018-02-06T13:14:12+00:006 February 2018|UK - Non EU, UK- EU|14 Comments