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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’. (more…)

October 17th, 2018

Posted In: UK- EU

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Image of Alan Winters26 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. (more…)

September 26th, 2018

Posted In: UK- EU

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Photo of Emily Lydgate19 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. (more…)

September 19th, 2018

Posted In: UK- EU

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Image of Alan Winters23 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. (more…)

July 23rd, 2018

Posted In: UK - Non EU

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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). (more…)

July 10th, 2018

Posted In: UK- EU

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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. (more…)

May 17th, 2018

Posted In: UK- EU

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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? (more…)

May 1st, 2018

Posted In: UK- EU

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Image of Alasdair SmithMichael Gasiorek6 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. (more…)

February 6th, 2018

Posted In: UK - Non EU, UK- EU

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16 January 2018

Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO. Nick Jacob is a PhD Candidate in Economics at the University of Sussex.

The need for UK firms to comply with detailed Rules of Origin in a possible post-Brexit Free Trade Agreement with the EU has been widely reported. But the different procedures which firms could use to prove their compliance — and the costs to firms in time and money — have been mostly overlooked. (more…)

January 15th, 2018

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8 December 2017

Jim Rollo is Deputy Director of UKTPO, Emeritus Professor of European Economics at the University of Sussex and Associate Fellow, Chatham House. Dr Peter Holmes Reader in Economics at the University of Sussex and Fellow of the UKTPO.

The agreement to proceed to the next phase of  Brexit talks is a step forward on the road to a softer Brexit. But it does not offer a definitive solution to the status of the Irish border, which will depend on the nature of the final agreement on the UK-EU trade relationship. At best, it represents an exercise in constructive ambiguity designed to allow the shape and length of any interim agreement, which will help determine the shape of the long-term agreement and, in turn, will be the basis of any permanent solution to the status of the Irish land border with Northern Ireland. (more…)

December 8th, 2017

Posted In: UK- EU

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