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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

Posted In: UK- EU

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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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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

Posted In: UK- EU

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31 May 2017

Compiled by Fellows of the UKTPO

Brexit will leave many areas of UK policy open to change. International trade policy is among the most important of these for UK prosperity and also among the most immediate because the status quo cannot simply be extended. This is the sixth in a series of blogs reporting what the major political parties say about trade policy in their 2017 manifestos, as they become available.

The UK Trade Policy Observatory (UKTPO) has set out a series of issues that it believes should be considered in any election manifesto that might form the basis of the UK’s future trade policy. The table below checks whether or not the SNP Manifesto mentions these important elements explicitly or implicitly. Following that, we offer a brief commentary on the treatment of trade policy in the manifesto. (more…)

May 31st, 2017

Posted In: UK - Non EU, UK- EU

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24 May 2017

Compiled by Fellows of UKTPO

Brexit will leave many areas of UK policy open to change. International trade policy is among the most important of these for UK prosperity and also among the most immediate because the status quo cannot simply be extended. This is the fourth in a series of blogs reporting what the major political parties say about trade policy in their 2017 manifestos, as they become available.

The UK Trade Policy Observatory (UKTPO) has set out a series of issues that it believes should be considered in any election manifesto that might form the basis of the UK’s future trade policy. The table below checks whether or not the Green Party Manifesto mentions these important elements explicitly or implicitly. Following that we offer a brief commentary on the treatment of trade policy in the manifesto.

A central aim of the Green Party is for the UK to remain in the EU, or at least in the single market. The former implies no change to current trade policies and hence little need to discuss them in the manifesto. Thus their coverage of trade policy beyond that with the EU is restricted to human rights and social and environmental conditions.

(more…)

May 24th, 2017

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19 May 2017

Compiled by Fellows of UKTPO

Brexit will leave many areas of UK policy open to change. International trade policy is among the most important of these for UK prosperity and also among the most immediate because the status quo cannot simply be extended. This is the third in a series of blogs reporting what the major political parties say about trade policy in their 2017 manifestos, as they become available.

The UK Trade Policy Observatory (UKTPO) has set out a series of issues that it believes should be considered in any election manifesto that might form the basis of the UK’s future trade policy. The table below checks whether or not the Conservative Manifesto mentions these important elements explicitly or implicitly. Following that we offer a brief commentary on the treatment of trade policy in the manifesto. (more…)

May 19th, 2017

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18 May 2017

Compiled by Fellows of UKTPO

Brexit will leave many areas of UK policy open to change. International trade policy is among the most important of these for UK prosperity and also among the most immediate because the status quo cannot simply be extended. This is the second in a series of blogs reporting what the major political parties say about trade policy in their 2017 manifestos, as they become available.

The UK Trade Policy Observatory (UKTPO) has set out a series of issues that it believes should be considered in any election manifesto that might form the basis of the UK’s future trade policy. The table below checks whether or not the Liberal Democrats’ Manifesto mentions these important elements explicitly or implicitly. Following that we offer a brief commentary on the treatment of trade policy in the manifesto.

The central plank of the Liberal Democrats’ manifesto is remaining in the single market and the customs union. This implies no change to current trade policies and hence little need to discuss them in the manifesto. Thus their coverage of trade policy is rather sparse. (more…)

May 18th, 2017

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26 April 2017

On 22 February 2017, UKTPO, CBI and the TUC held an event in Newcastle that brought together employees and employers to discuss the important regional issues for post-Brexit trade. This guest blog by Sarah Glendinning, Regional Director for the North East, CBI; and Beth Farhat, Regional Secretary, Northern TUC draws on this discussion.

Now that Brexit negotiations are officially underway it’s important to consider what kind of deal workers and businesses want from negotiations, and what kind of deal will enable all parts of the country to develop and prosper after we leave the EU.

As representatives of working people and businesses from across the North East, we are seeking a Brexit deal that ensures stability and delivers decent jobs, fair pay and growth for the region. (more…)

April 26th, 2017

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19 April 2017

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

In this blog, Professor Winters responds to Patrick Minford and Edgar Miller’s recent paper on unilateral free trade in relation to Brexit.

Economists for Free Trade’s Patrick Minford recently suggested that the UK should

simply eliminate our tariffs on them [the EU], and by implication – under WTO rules – on everyone else. By doing so, we would achieve free trade for our consumers with one quick move [and increase consumer welfare by 4%] Minford (2017).

This, he explains in a fuller exposition, is achievable ‘via Unilateral Free Trade’ – see page 8 of Minford and Miller (2017), henceforth referred to as M&M.

But this claim is misleading or worse:

  • It is based on a very particular view of the world economy,
  • Even in M&M’s own analysis, the benefits of 4% of welfare (or GDP) depend on far more than ‘simply eliminating tariffs’; they also require deeper integration with the EU and a race to the bottom on standards;
  • M&M assume that the devaluation of sterling will have no effect on the prices of UK imports!

(more…)

April 19th, 2017

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29 March 2017

New analysis shows that the nations of the UK are exposed to trade with the EU in quite different ways. If the UK leaves the EU without a trade deal the effects across regions will be quite different and this should therefore influence our trading priorities

Our Fellows have analysed trade data to examine the regional and sectoral impact of Brexit as well as the overall national impact.

Their findings, portrayed in a short video animation show that choosing trade priorities on the basis of aggregate UK data does not take into account the fact that the nations within the UK are exposed to trade with the EU in different ways.

(more…)

March 29th, 2017

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