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Image of Alan Winters14 March 2019

Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex and Julia Magntorn Garrett is a Research Officer in Economics at the University of Sussex. Both are fellows of the UK Trade Policy Observatory. L. Alan Winters CB is Professor of Economics and Director of the UK Trade Policy Observatory.

Key points:

  • Around 72% of UK’s MFN tariff lines will see reduced protection.
  • The UK’s average MFN tariff is reduced significantly, from around 7.7% to 0.7%; however this does little to increase the share of duty-free imports.
  • The UK’s MFN tariff proposal will reduce tariffs on many products imported from countries currently trading on WTO terms, but increase them on imports from the EU.

Following the first defeat of the Withdrawal Bill in Parliament, and prior to yesterday’s vote on a ‘No Deal’ alternative, the Government published the temporary tariff schedule it proposes to apply in the event of a no deal. As with most things Brexit, this is complicated to unpick, especially as some of the listed items are simply asterisked, and the details on these need to be found in another (1400 page) document! (more…)

March 14th, 2019

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Image of Alan Winters13 March 2019

L. Alan Winters CB is Professor of Economics and Director of the UK Trade Policy Observatory.

With Mrs May’s deal again defeated in the House of Commons yesterday evening, Professor L. Alan Winters asks how the UK got to be within 16 days of leaving the EU with no agreed plan for its departure or future relationship with the EU.

In the video ‘Mrs May’s Impasse’ Professor Winters explains how incompatible economic and political agendas and ill-considered red-lines led to the current impasse on Brexit and argues that one or the other has to give if the UK is to avoid ‘No Deal’.

March 13th, 2019

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Image of Alan Winters12 March 2019

Julia Magntorn Garrett is a Research Officer in Economics at the University of Sussex and a fellow of the UK Trade Policy Observatory and L. Alan Winters CB is Professor of Economics and Director of the UK Trade Policy Observatory.

Tariffs are the simplest and most direct of the tools of trade policy: they are taxes on imports. Broadly speaking, high tariffs help to shelter domestic industries from international competition, whereas lower tariffs increase competition and benefit consumers through both lower prices and permitting a wider variety of products to choose from. Despite saying that taking back control of its trade policy is imperative and that the UK may have its own trade policy in under three weeks (30th March), the Government has yet to reveal its policy for UK tariffs. The Financial Times recently reported that the plan was to eliminate the majority of industrial tariffs and, in the same vein, Sky News reported on the Government’s intention to cut 80-90% of all tariffs to zero. Many business owners are anxiously awaiting further information, as they may have only a matter of weeks to adjust to changes that could seriously affect their business. (more…)

March 12th, 2019

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Photo of Emily Lydgate11 March 2019

Dr Emily Lydgate is a lecturer in Law at the University of Sussex and a fellow of the UK Trade Policy Observatory.

On Tuesday Theresa May will again bring before Parliament the EU deal for which she suffered a defeat of 230 votes – the worst ever. Whilst the scale of the defeat suggests that the deal is an affront to the will of MPs, the rejected Withdrawal Agreement, with its Northern Irish ‘backstop’, accomplished two things that many support – or at least are moving toward by default. The first is a trade agreement that respects the outcome of the Referendum yet provides a measure of frictionless trade. The second is to avoid leaving the EU with no deal.

(more…)

March 11th, 2019

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5 March 2019

Ilona Serwicka is Research Fellow in the economics of Brexit at the UK Trade Policy Observatory.

Last week, the United States published a document that set out their negotiating objectives for a trade agreement with the UK, shortly after the publication of virtually identical documents for negotiating with the EU and with Japan. Those in the UK who expected ‘special treatment’ from the US are in for a disappointment, but not a surprise (as UKTPO researchers pointed out in October 2016). In negotiating with major trading partners after Brexit, the UK is likely to be a price taker because of a power imbalance. (more…)

March 5th, 2019

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27 February 2019

Ilona Serwicka is Research Fellow in the economics of Brexit and Peter Holmes is a Reader in Economics at the University of Sussex. Both are Fellows of the UK Trade Policy Observatory.

There are proposals to relax customs rules and duties in specially-designated areas known as free ports or more generally free zones. But these would make little impact on rebuilding the UK economy after Brexit, reveal Dr Serwicka and Dr Holmes in our latest Briefing Paper ‘What is the extra mileage in the reintroduction of ‘free zones’ in the UK?’ (more…)

February 27th, 2019

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25 February 2019

Julia Magntorn Garrett is a Research Officer in Economics at the University of Sussex and a fellow of the UK Trade Policy Observatory.

Two weeks ago, the UKTPO called for further transparency on the Government’s current progress on replicating the existing agreements between the EU and third countries. On Thursday last week, Secretary of State for International Trade, Liam Fox MP made a public announcement confirming that little had changed since he gave evidence to the International Trade Select Committee on the 6 February and that the progress has been minimal. So far, only six out of the 40 existing trade agreements have been signed, covering a total of 9 countries; Chile, Faroe Islands, Switzerland, Israel, Palestinian Authority, Madagascar, Mauritius, Seychelles and Zimbabwe. One further agreement is close to being finalised, adding another 2 countries (Fiji and Papua New Guinea) to the list. This still leaves about 60 Free Trade Agreement (FTA) countries without continuity agreements.

Dr Fox also announced that some agreements will definitely not be in place for exit day, those with Andorra, Japan, Turkey, and San Marino. The agreement with Algeria is also unlikely to be ready. When it comes to numbers, the announcement is thin on details. The Department for International Trade states that the EU-FTA agreements account for 11% of the UK’s trade, a figure that seems low to start with. No further information is provided as to how important the signed countries are to the UK’s trade, or how much of the UK’s trade with the rest of the FTA group is still at risk if we have a hard Brexit in about a month’s time. This blog aims to fill some of these gaps. (more…)

February 25th, 2019

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19 February 2019

Ilona Serwicka, Research Fellow in the economics of Brexit at the UK Trade Policy Observatory and Nicolo Tamberi, Research Assistant in Economics for the Observatory.

Earlier this month, Japanese car manufacturer, Nissan made an unexpected U-turn and announced that it was no longer planning to manufacture its new X-Trail SUV model at the Sunderland plant. In a statement, Nissan said that:

‘while we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future’.[1]

Yesterday, another Japanese car manufacturer, Honda, said that it was going to close its Swindon plant in 2021, and consolidate its production operations in Japan – a move that is going to put some 3,500 jobs at risk, with more jobs threatened in the supply chain. Early speculation suggests that tariff-free access to the EU is among the factors behind the company’s decision.[2]

Although neither Nissan nor Honda explicitly blamed Brexit for a decision to scale down their operations in the UK, Brexit provides the context for the decisions and for the steps that can be taken to cope with them. (more…)

February 19th, 2019

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Image of Alan Winters14 February 2019

L. Alan Winters CB, Professor of Economics and Director of the UK Trade Policy Observatory.

Key Points:

  • New research from OECD shows that the European Single Market dramatically lowers the barriers to services trade within the European Economic Area (EEA). Yet,
  • far from prioritising the preservation of such access for UK services trade, the UK political and media debate is focused almost entirely on the much smaller goods sector.

(more…)

February 14th, 2019

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13 February 2019

Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex and a fellow of the UK Trade Policy Observatory.

Currently, there is much focus on the politics of getting some version of the Withdrawal Agreement through Parliament. This requires a political resolution to the inclusion of the ‘backstop’ in the Withdrawal Agreement. The strategy appears to be to come up with “alternative arrangements” which will be acceptable to the UK Parliament and to which the EU can agree. A spoonful of sugar might help the medicine go down.

However, even if this can be achieved the fundamental issue will not have been resolved.   (more…)

February 13th, 2019

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