Rules of Origin

UK-EU trade relations: A checklist of 10 key issues

20 November 2020 Michael Gasiorek is Professor of Economics at the University of Sussex and Director of the UKTPO. Discussions and evaluations on the future UK-EU relationship have been on-going since the referendum of June 2016, and we are close to another milestone – by the end of the year, we will either have a free trade agreement (FTA) with the EU or no-deal. Note this is a milestone and not the endgame. Whether or not there is an agreement there will still be considerable practicalities to resolve, and no doubt some areas will be open to future negotiation. There is a lot of talk in the press about sticking points (fisheries, state aid and level playing field provisions, dispute settlement) but how good the deal is for the UK will depend on the scope and the depth of what is agreed, and whether some areas are only notionally covered and need to be sorted out in future negotiations. […]

By Nick Phipps|2020-11-20T17:31:49+00:0020 November 2020|UK- EU|2 Comments

Made in England? Why the UK Government wants Korean and Japanese goods to have same trade benefits as home made products

3 July 2020 A car constructed entirely of Korean components could be classed as Made in Britain under proposals put forward by the UK Government to the EU, our new analysis reveals. As part of its negotiations over a Free Trade Agreement (FTA), the UK is calling on the EU to allow it to escape EU tariffs on products made with imported parts from any country in the world that both the EU and the UK have FTAs with. The UK Government is requesting that goods using inputs imported from third parties should be treated as if they had been made in the UK so long as the two relevant FTAs have equivalent rules of origin. […]

By Nick Phipps|2020-07-03T09:28:26+01:003 July 2020|UK- EU|0 Comments

The UK’s Continuity Trade Agreements: Is the roll-over complete?

29 March 2019 Nicolo Tamberi is Research Assistant in Economics for the UK Trade Policy Observatory and L. Alan Winters CB is Professor of Economics and Director of the Observatory. The eight EU Trade Agreements that the UK has rolled-over replicate current trading conditions with their respective partners to a substantial extent. However, conditions could still deteriorate for at least two reasons: A bilateral negotiation that excludes the EU can only partially overcome possible problems with rules of origin; UK regulation and/or certification can be recognised only where partners have not tied themselves to EU regulations. Where they have, recognition of UK regulation and certification must wait until the UK also aligns with the EU. […]

By Nick Phipps|2019-03-29T11:39:37+00:0029 March 2019|UK - Non EU, UK- EU|3 Comments

What should we make of the Government’s Brexit estimates?

30 November 2018 L. Alan Winters CB, Professor of Economics and Director of the UK Trade Policy Observatory, Dr Michael Gasiorek, a Senior Lecturer in Economics at the University of Sussex and Peter Holmes, Reader in Economics at the University of Sussex both fellows of the UK Trade Policy Observatory. We welcome the Government’s estimates of the economic consequences of alternative Brexits. They are way overdue. The modelling was very competently done. But the assumptions made tended to favour the Government’s preferred position over other alternatives. On Tuesday, the UK Government released a set of cross-Departmental estimates of the possible economic costs of different Brexit options. They were based on the Government’s own modelling, which uses a technique known as a Computable General Equilibrium modelling and is based on the Global Trade Analysis Project (GTAP) consortium’s world model and dataset. The aim is to model (very approximately) the important linkages in an economy over a medium to long-term horizon and to assess the possible impact of changes in trade policy on the economy. (Short-term modelling, over a five year period, was simultaneously released by the Bank of England, but we do not discuss it here). The modelling approach is relatively [...]

By Nick Phipps|2018-11-30T12:37:50+00:0030 November 2018|UK - Non EU, UK- EU|0 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

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

Decoding the Facilitated Customs Arrangement

23 July 2018 L. Alan Winters CB is Professor of Economics and Director of the Observatory and Julia Magntorn is Research Officer in Economics at the UKTPO. There is much to digest in the White Paper on The future relationship between the United Kingdom and the European Union and much to clarify. This blog is devoted entirely to trying to understand the Facilitated Customs Arrangement (FCA) that aims to deliver frictionless trade in goods between the UK and the EU after Brexit. The FCA matters because trade that is ‘as frictionless as possible’ with the EU is now accepted by nearly everyone as desirable and has been characterised by much of business as essential. It also matters in the short term, however, because it is the UK government’s offer to the EU on how to ensure that there is no border between Northern Ireland and the Republic. Without a solution to this latter problem there will be no Withdrawal Agreement and no transition. […]

By Nick Phipps|2018-07-23T11:44:46+01:0023 July 2018|UK - Non EU|6 Comments

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

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