trade

UK Trade and Trade Policy after Brexit

International trade plays a crucial role in fostering economic growth across a wide range of industries at the national and the regional level. The prospects for UK’s international trade are closely tied to the future relationship between the UK and the EU. Voters are being offered a wide spectrum of choices, ranging from continued membership to the EU, a customs union-type relationship by the Labour party, a looser arrangement under a free trade agreement with the governing Conservative party, and a clean break with trade on WTO terms with the Brexit party.

The economic impact on the United Kingdom of a customs union deal with the European Union

In the wake of Parliament’s rejection of the proposed Brexit deal, there have been discussions between the Government and the Labour Party on a customs union as the basis for the future relationship between the United Kingdom and the European Union. This option also gained substantial support in the indicative votes held in the House of Commons in late March and early April. Therefore, even if the Government and the Labour Party cannot reach an agreement, a customs union deal is unlikely to disappear from the agenda any time soon.

The Economic Effects of the Government’s proposed Brexit Deal

Read Garry Young's note on the methodology behind this report here.

 

This report estimates the economic effects of the government’s proposed Brexit deal that was first published on 14 November 2018, and subsequently expanded.

Measuring the permanent costs of Brexit

We analyse the costs of Brexit. The results show that by 2030 a hard Brexit would reduce cumulative GDP growth by 18 percentage points compared to a situation where the UK continued its EU membership. The economic damage in our FTA and soft Brexit scenarios is less severe than in our hard Brexit scenario, although it will still cost the UK economy roughly 12.5 percentage points and 10 percentage points of cumulative GDP growth by 2030, respectively. We find much larger negative effects than most existing studies that use macroeconometric modelling to assess the effects of Brexit.

Brexit and the UK automotive industry

The UK’s automotive industry has been one of the ‘star performers’ of the UK economy in recent years – unlike most other manufacturing sectors. Output has increased by over 60 per cent since 2010 and there has been over £8 billion worth of investment in the industry in the past five years. The industry supports some 800,000 jobs in the UK. It is seen as having benefitted from EU membership. So what might Brexit mean for the UK automotive sector, and its workers?

UK and EU Brief - Trade Brief

Summary data for UK and EU Trade