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15 July 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. 

A favourite band (of at least one of the authors of this blog) from the 1980s was the Cocteau Twins (See, or rather listen to…Sugar Hiccup) – well-known for the dreamy unintelligibility of their lyrics.  Which of course leads to the dreamy unintelligibility of some of the promises being made around Brexit. Supporters of Brexit have argued that the UK need not be overly concerned with a ‘No deal’ Brexit. This ranges from positions that ‘No deal’ would not be “as frightening as people think” although there would be “some hiccups in the first year” (David Davies), and that although there may be “some disruption” Britain would “survive and prosper without a deal” (Jeremy Hunt), to arguments that the idea that ‘No deal’ would have a negative impact were “a fantasy of fevered minds” (Jacob Rees Mogg). (more…)

July 15th, 2019

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Image of Alan Winters03 July 2019

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

Last week I was challenged twice for using the term ‘no deal’. There is no such thing, I was told, because, even if the UK does not ratify the Withdrawal Agreement of 25th November 2018, there will still be plenty of deals. At the time I thought, for several reasons, that this was wrong in substance if not literally, but more recently I have concluded that it is also dangerous.  Like we saw in the referendum campaign, it undermines informed debate by deliberately confusing the terminology.

‘The deal’ is an agreement between the EU and the UK ‘setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union’ (Article 50 – Treaty on European Union). ‘No deal’ is the absence of such a deal. For business and the economy, ‘no deal’ has come to mean the absence of a trade agreement under which the UK and the EU trade with each other on terms better than those provided for under the World Trade Organization. The former ‘no deal’ implies the latter – as I argue below – but the reverse is not true. (more…)

July 3rd, 2019

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28 June 2019

Nicolo Tamberi is a Research Assistant in Economics for the UK Trade Policy Observatory. Dr Ingo Borchert is Senior Lecturer in Economics at the University of Sussex and a fellow of the Observatory.

On Wednesday, the Department for International Trade (DIT) released its official statistics on inward foreign direct investments (FDI) for the financial year 2018-19.[1] As stated by the DIT, these data measure the inflow of ‘new investment, expansion, and mergers & acquisition’ projects, both publicly announced and not. (more…)

June 28th, 2019

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Erika Szyszczak26 June 2019

Erika Szyszczak is a Research Professor in Law at the University of Sussex and a Fellow of UKTPO

The Dispute Mechanism Systems (DMS) in many trade agreements have lain dormant because countries preferred to use the World Trade Organization (WTO), with its Appellate mechanisms, as the forum to resolve international disputes. This may change in the coming years as the confidence in, and reliability of the WTO, is slowly paralysed by the disruptive attitude of the United States. One question that emerges is whether the use of EU dispute resolution mechanisms offer a faster and clearer approach towards dispute resolution and might serve as a model for future regional trade treaties. (more…)

June 26th, 2019

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Erika Szyszczak11 April 2019

Erika Szyszczak is Professor of Law at the University of Sussex and a fellow of UKTPO.

Tempting as it is to work through the lyrics of the Paul Simon song,* the latest round of Brexit talks between the UK and the EU are already translating into the movie: The Long Goodbye.

By a Decision adopted on 11 April 2019, the European Council – under the patient and saintly leadership of Donald Tusk – agreed to grant the UK a second extension to Article 50 TEU either until 31 October 2019, or, an earlier date (if the Withdrawal Agreement is ratified) or until 31 May 2019 if the UK fails to hold elections to the European Parliament. The UK has in fact put in place an Order to facilitate the organisation of the elections to the European Parliament. (more…)

April 12th, 2019

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Image of Alan Winters3 April 2019

Dr Michael Gasiorek is a Senior Lecturer in Economics at the University of Sussex and a fellow of the UK Trade Policy Observatory. L. Alan Winters CB is Professor of Economics and Director of the Observatory.

Understandably the politics surrounding the UK’s exit from the EU are dominating current discussions. But the economics of the options still matter, and it is not always evident how well the core economic issues are understood.

In the light of the Government’s ‘approach’ to Labour to find a consensus and in the light of the indicative votes, the aim of this blog is to clearly outline the economic issues and summarise the likely consequences associated with two of the current (indicative) options. (more…)

April 3rd, 2019

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1 April 2019

Dr Ingo Borchert is Senior Lecturer in Economics and Julia Magntorn Garrett is a Research Officer in Economics at the University of Sussex. Both are fellows of the UK Trade Policy Observatory. 

During the first round of the indicative voting process at Parliament, the motion that proposes a permanent customs union attracted the second highest number of Ayes and was rejected by the slimmest margin of all eight motions.  This result shows the prevailing preoccupation with trade in merchandise goods.  Amongst other things, a customs union alone does nothing for services trade.  In this blog, we set out why the continued neglect of services trade is a major concern for the UK economy.[1] A twin-jet aircraft with just one engine on would ordinarily be bound for an emergency landing rather than for a smooth journey ahead. (more…)

April 1st, 2019

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Image of Alan Winters29 March 2019

Nicolo Tamberi is Research Assistant in Economics for the UK Trade Policy Observatory and L. Alan Winters CB is Professor of Economics and Director of the Observatory.

The eight EU Trade Agreements that the UK has rolled-over replicate current trading conditions with their respective partners to a substantial extent. However, conditions could still deteriorate for at least two reasons:

  • A bilateral negotiation that excludes the EU can only partially overcome possible problems with rules of origin;
  • UK regulation and/or certification can be recognised only where partners have not tied themselves to EU regulations. Where they have, recognition of UK regulation and certification must wait until the UK also aligns with the EU.

(more…)

March 29th, 2019

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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 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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