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Analysing the Economics of BREXIT and World Trade

Author(s): David T. Llewellyn

Date published: May 2019

SUERF Policy Note, Issue No 72
By David T. Llewellyn, Loughborough University

 

JEL-codes: E65, F02, F15.
Keywords: Brexit, European Union, Withdrawal Agreement, World Trade Organisation, Free Trade.

 

The UK has been engaged in its most momentous and historic set of international negotiations in generations. And yet even after three years since the referendum, no consensus has emerged in Parliament about the type of BREXIT it is willing to support. The negotiations with the EU Commission have been particularly complicated as the governing Conservative party (and even the Cabinet) has been split on key aspects of the BREXIT debate.

Although there is a wider set of complex political and constitutional implications, the focus in this paper is exclusively on: (1) the trade and economic implications, (2) the range of alternative BREXIT models, and (3) the economic and political trade-offs involved. Some advocates of BREXIT accept that, while there will be net economic costs, in a cost benefit calculation, they are worth paying in order to secure the alleged wider benefits of alleged enhanced sovereignty, etc.

There have been three basic strands in the negotiations between the UK and the EU:

(1) the Withdrawal Agreement,
(2) the conditions during the twenty-one month transition period during which detailed trade negotiations will take place, and
(3) the contentious issue of a possible Hard Border and backstop between Northern Ireland and Eire. 

 

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SUERF Policy Note, Issue No 72SUERF Policy Note, Issue No 72

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