Free Trade Agreement

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 Nick Phipps|2018-05-17T13:41:05+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 Nick Phipps|2018-03-29T10:20:25+01:0029 March 2018|UK - Non EU, UK- EU|3 Comments

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. […]

By Nick Phipps|2018-03-26T11:55:36+01:0026 March 2018|UK - Non EU, UK- EU|4 Comments

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] […]

By Nick Phipps|2018-02-22T17:20:41+00:0022 February 2018|UK - Non EU, UK- EU|3 Comments

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. […]

By Nick Phipps|2018-02-15T21:04:42+00:0015 February 2018|UK - Non EU, UK- EU|3 Comments

Magic realists and economic realists

15 December 2017 Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex, and is a member of the UK Trade Policy Observatory. The deal done on Friday December 8 in the Brexit negotiations has already been subject to conflicting interpretations. The UK has committed to having no hard border in Ireland, and committed in terms which seem to admit no rowing back. […]

By Nick Phipps|2017-12-15T17:46:28+00:0015 December 2017|UK- EU|8 Comments