27 August 2019
Alasdair Smith is an Emeritus Professor of Economics at the University of Sussex and is a member of the UK Trade Policy Observatory
The adjective ‘undemocratic’ has for a few weeks now been mysteriously attached to the Ireland backstop provision in the Withdrawal Agreement. The prime minister’s letter of August 19th to Donald Tusk, president of the EU Council, at least explained why: the backstop is said to be undemocratic because it binds the UK after Brexit into EU trade and regulatory policies in which it will have no say.
This is not a new idea. From early on in the Brexit debates, many economists assumed there would be compelling economic incentives for a post-Brexit UK to remain in the European Economic Area (EEA). Alan Winters pointed out that this would mean the UK would have to pay (financial contributions to the EU) and obey (EU rules) but with no say (in setting the rules). The Irish backstop is not the same as the EEA, but ‘obey with no say’ is the ‘undemocratic’ objection.
The prime minister’s solution is that the backstop should be replaced by alternative arrangements for the Irish border which would allow the UK to choose its own different trade and regulatory policies. There is widespread agreement that no such alternative arrangements are currently available.
Tina Perrett August 28th, 2019
Posted In: UK- EU
7 August 2018
Nicolo Tamberi is a Research Officer in Economics for the UK Trade Policy Observatory.
In a recent post on Brexit Central , Michael Burrage examines the growth of different countries’ exports to the EU12 over 1993-2015 and asks:
‘How can trading with the EU under WTO rules be the worst possible option when the exports to the EU of 15 countries which have been doing just that over 23 years of the Single Market have grown four times as much as those of the UK, despite all the tariff and non-tariff barriers they have faced?’
The answer is ‘easily’!
Tina Perrett August 7th, 2018
Posted In: UK- EU
Tags: Brexit, China, export, growth rates, Single Market, USA, WTO rules
3 August 2018
Dr Emily Lydgate is a lecturer in Law, Dr Peter Holmes is a reader in Economics and Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex. They are all fellows of the UK Trade Policy Observatory.
In describing the future regulatory relationship between the EU and UK, the recent UK White Paper proposes the notion of ‘equivalence’ in some areas. This may seem like a mere technical requirement, but equivalence is a loaded word in trade policy circles, and the UK government’s reliance on it bears further scrutiny.
With respect to goods, ‘equivalence’ shows up in two main ways. First, the UK states that it will maintain equivalence (rather than exact harmonisation with EU regulation) for some food policy rules in the context of a (more…)
Tina Perrett August 3rd, 2018
Posted In: UK- EU
Tags: Brexit, Equivalence, EU, Exports, WTO
26 October 2017
Nicolo Tamberi is Research Assistant for the UKTPO and Charlotte Humma is the UKTPO’s business manager.
Leaving the Single Market and the Customs Union will require the implementation of new border controls between the UK and the EU that will surely increase transport time and therefore costs. However minimal they may be, these new procedures will negatively affect trade between the two parties.
According to a study by EY, Economic footprint of the Channel Tunnel fixed link, trade between Folkestone and Calais via the Eurotunnel was estimated to be £91.4 billion or 24.8% of trade with the EU in 2014. Goods transported through the Channel Tunnel are exported from and imported to every region of the UK.
Today, transporting things from one shore to the other requires minimal controls such as those that exist between Surrey and Somerset. Businesses on both sides of the channel increase their efficiency by integrating their supply chains and by relying on the prompt connection across the channel. So, what about Brexit? If one thing is clear in the impenetrable mist surrounding the future UK-EU relations, it is that exiting the Single Market and the Customs Union will require increased border controls. (more…)
Tina Perrett October 26th, 2017
Posted In: UK- EU
Tags: Brexit, Customs Union, Ernst & Young, Eurotunnel, Exports, food, FTA, Imports, logistics, manufacturing, Single Market, Trade agreements
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…)
Tina Perrett August 16th, 2017
Posted In: UK- EU
Tags: Brexit, Customs Union, Exports, Negotiations, politics, tariffs, Trade agreements
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.
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Tina Perrett August 14th, 2017
Posted In: UK- EU
Tags: Brexit, Customs Union, Europe, Negotiations, Single Market, tariffs, trade
26 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 fifth 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 UKIP 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…)
Tina Perrett May 26th, 2017
Posted In: UK- EU
Tags: Brexit, Customs Union, Exports, FTA, General Election 2017, trade, Trade agreements, UKIP
17 March 2017
Guest blog by Paul Eden, Senior Lecturer in Law at the University of Sussex
Now that the European Union (Notification of Withdrawal) Act has received Royal Assent, the UK government is on track to meet its deadline of invoking Article 50 of the Treaty of European Union (TEU) by the end of March. Whilst it seems inevitable that the UK will indeed invoke Article 50 a key question that remains is whether we can change our minds and stop the whole process, perhaps when we are a year down the line or if there was a change in government in the UK. (more…)
Tina Perrett March 17th, 2017
Posted In: UK- EU
Tags: Article 50, Brexit, law, Legal Issues, Vienna Convention on the Law of Treaties
2 March 2017
Giordano Mion is a Professor of Economics at the University of Sussex and fellow of the UK Trade Policy Observatory
“The people have spoken” on Brexit. The UK is leaving the EU. We now need to focus on how the UK can maintain a leading world trade position in this new scenario.
Brexit has cast a shadow over the future international position of the UK and its trading relationship with both the EU and non-EU partners. Much attention has been devoted to number crunching regarding the costs related to the UK leaving the EU. Whilst some figures look more credible than others, both before and after the vote, there has been large discrepancies – leading to confusion and an overall lack of key message.
Tina Perrett March 2nd, 2017
Posted In: UK- EU
7 February 2017
Dr Emily Lydgate is a lecturer in Law at the University of Sussex and a fellow of the UK Trade Policy Observatory.
While the UK government White Paper on leaving the EU may be light on detail, it does suggest that securing UK environmental protections is near the bottom of its list of priorities, with a scant dedicated paragraph (8.41). Compare this with its complete section on worker’s rights; or compare to the country of Wales, which includes maintaining social and environmental standards as one of six Brexit priorities. (more…)
Tina Perrett February 7th, 2017
Posted In: UK - Non EU, UK- EU
Tags: Article 50, Environment, FTA, Negotiations, Regulations, TTIP, USA, White Paper
