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1st September 2017

Erika SzyszczakErika Szyszczak is a Professor of Law at the University of Sussex, independent ADR Mediator and a Fellow of the UKTPO.

This week it was reported that the PM, Theresa May intends to “cut and paste” existing EU trade deals when forging a new trade policy for the UK.

Today the EU-Ukraine Association Agreement (AA) officially came into force, although most of the provisions of the AA have been provisionally applied since 1 September 2014, with the trade provisions contained in the novel Deep and Comprehensive Free Trade Area (DCFTA), provisionally applied since 1 January 2016. The AA is a new model of external relations for the EU and it addresses matters beyond trade (cooperation in foreign and security policy, justice, freedom and security (including migration) taxation, public finance management, science and technology, education and information society). It is an innovative form of external action in offering a new type of economic integration without membership of the EU: an integration-oriented agreement. The new AA may reveal some lessons for the UK as it seeks new models of trade relationships. Indeed, the AA has already entered the consciousness of the wider public as a potential model for UK-EU trade agreements post-Brexit, but, in fact, it is a most unlikely model given that the UK does not want such a deep commitment beyond trade provisions with the EU. (more…)

September 1st, 2017

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23 August 2017

Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO

The government’s new paper  “Continuity in the availability of goods for the EU and the UK – a position paper“ acknowledges the problems that will be created by a hard Brexit in which there is a disruption in the systems for verifying compliance with mandatory standards.

The problem is that its substantive proposals deal with only the most immediate disruptions in the sale of goods that are already in the supply chain at the moment of Brexit. The official description acknowledges this: “This paper outlines the UK’s position on continuity in the availability of goods in UK and EU markets at the point of EU exit” (my italics).

Yet, the key requirement for the British economy is that there needs to be a permanent system in place for ensuring that UK product inspection systems are recognised by the EU for goods made after Brexit. (more…)

August 23rd, 2017

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Image of Alan Winters21 August 2017

L. Alan Winters CB, Professor of Economics and Director of UKTPO.

Economists for Free Trade (EfFT) are back, offering the Introduction to an unpublished – and hence unknown – report that claims £135 billion benefits from Brexit. It not only repeats the previous claim that GDP will increase by 4% if the UK adopts free trade, which I characterised  as ‘doubly misleading’ in April, but it adds in an extra 2% from ‘improved regulation’, 0.6% from our net budget contribution to the EU and 0.2% from removing the ‘subsidy to unskilled immigration’. It also promises faster growth as well.

I’ll come back to free trade, but, first, what regulations will be improved? We are not told. Similarly, what subsidy to immigration? Who knows? The budget contribution to the EU may be saved, but we will need to spend much of it on providing replacements for various EU regulatory bodies such as the European Medicines Agency, on negotiating new deals on things like airlines or nuclear isotopes, supporting farmers (which EfFT apparently accepts), on customs formalities on trade with the EU, on managing alleged unfair trade and on trade disputes, etc. Until we see the details, you have to doubt these numbers. (more…)

August 21st, 2017

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16 August 2017

Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO

The UK government has just issued its official position paper on the issue of the customs union and Brexit. It emphasises a desire for the “most frictionless trade possible in goods between the UK and the EU” and proposes two ways of achieving this in the long term, while making it clear that the UK will leave the EU’s customs union when it leaves the EU.

The first option it proposes is a “streamlined customs arrangement” which sounds like a form of free trade agreement (but there is no mention of this as an aim). It involves keeping in place a number of the existing customs arrangements and using (untested) electronic technology to ensure the smooth processing of all documentation. The stated aim is to keep border arrangements as close as possible to what they are now to maintain continuity for businesses. (more…)

August 16th, 2017

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14 August 2017

After Brexit, the UK will have to leave the EU Customs Union (CU) and become a legally separate customs territory. It might then, however, seek to create a new Customs Union with the EU to cover their mutual trade.

The UK Trade Policy Observatory at the University of Sussex (UKTPO) has produced this short animated video that explains what this entails, and what kind of an agreement the UK and the EU would need to establish in order to achieve the same level of trade costs as we have now.

Ultimately, the video explains, a Customs Union will not produce ‘frictionless’ trade without re-creating several aspects of current EU membership. With Brexit negotiations already underway, it emphasises that maintaining a customs union is just one part of the story; and not, by itself, the be all and end all for achieving a smooth trading process.

 

August 14th, 2017

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27 June 2017

Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO

The UK government’s new approach to trade policy towards developing countries has just been released in a DFID document that has been widely commented on.  The government’s proposals are welcome, but yet they are not quite as generous as they may seem.

A Bloomberg piece says, optimistically: “The government promises improved access to U.K. markets for the world’s poorest countries”. However the only concrete promise is that

around 48 countries across the globe, from Bangladesh to Sierra Leone, Haiti and Ethiopia will continue to benefit from duty-free exports into the UK on all goods other than arms and ammunition, known as ‘everything but arms.”

In other words, the UK pledges to maintain existing arrangements for the poorest countries currently benefiting from the EU’s Everything but Arms deal (EBA). This amounts to simply maintaining the status quo for this group and is not actually an improvement.

(more…)

June 27th, 2017

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23 June 2017

L. Alan Winters CB, Professor of Economics and Director of UKTPO and Ilona Serwicka, Research Fellow at UKTPO

One year ago the British people voted to leave the EU. Out of 33.5 million votes cast, 51.9 per cent were for ‘leave’, albeit in the absence of any statement about what ‘leaving’ might mean. The government is still vague about what the UK’s post-Brexit trade policy should be – even after triggering the formal leave process – but the general election has pressured Theresa May to soften her Brexit stance. Even though Brexit negotiations are now formally under way, the options suddenly again seem wide open for debate.

In terms of options the UK is back at square one, but following a year’s analysis, it is now clearer what these options amount to. Over the year, the UK Trade Policy Observatory (UKTPO) has discussed many of the options and this note draws on some of that analysis to try to light the path forward. (more…)

June 23rd, 2017

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Image of Alasdair Smith19 June 2017

Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex, and is a member of the UK Trade Policy Observatory.

It’s now 12 months since the referendum decision, 3 months since the Article 50 notification, and only 21 months until the date on which the UK is due to exit the EU. Brexit negotiations start today, but most politicians have still not progressed beyond the stage of wishful thinking.

There are ambiguities about the objectives of both the large political parties but each seems to want some kind of free trade agreement (FTA) with the EU after Brexit, often described by a phrase like ‘tariff-free access to the single market’. Behind such inherently confused terminology lies an apparent wish to have a ‘deep’ FTA; that is to say, a UK-EU FTA which has no tariffs and sufficient regulatory convergence between the UK and the EU that many of the non-tariff advantages of the single market are retained.

Here’s the first hard truth: a deep UK-EU FTA cannot be negotiated in 21 months. Even much weaker agreements take longer, especially if the political and technical ground has not been prepared in advance, so it’s not ‘challenging’ or ‘ambitious’ or ‘difficult’: everyone who understands the reality of trade negotiations knows that it is completely impossible. (more…)

June 19th, 2017

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12 June 2017, 

L. Alan Winters CB, Professor of Economics and Director of UKTPO.

Suddenly everyone is talking again about the UK’s new trading relationship with the rest of the EU. Given the structure of the new Parliament, any party’s views may turn out to be pivotal. This blog is partly about what the parties say and partly about making conversation between them fruitful by clarifying the language. (more…)

June 12th, 2017

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Portrait image of David Bowlesimage of Iyan I.H. Offor12 June 2017

Guest blog by Iyan I.H. Offor, Trade & Animal Welfare Project Officer at Eurogroup for Animals and David BowlesAssistant Director, Public Affairs, RSPCA.

The Conservative Government has been quick to highlight the potential benefits and quick wins for animal welfare made possible by new UK trade competencies post-Brexit. However, experience with the reality of trade negotiations is making some animal welfare organisations more sceptical.

The UK has some of the highest standards in the world enacted under a legislative model. This is in contrast to the approach of the US and Canada, for example, which place reliance upon voluntary industry standards. Diverging welfare standards can result in increased imports of low-welfare products for two reasons. First, lower animal welfare standards are invariably linked to cheaper production which out-factors transport costs. Second, there are no effective mandatory product labelling mechanisms for animal welfare, except for shell eggs. Thus, although consumers express willingness to buy higher welfare products and to pay a premium for such products, they inadvertently purchase low welfare meat and dairy because the market does not operate transparently. This puts the livelihoods of British farmers who comply with animal welfare production requirements at risk. (more…)

June 12th, 2017

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