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UK trade and FDI: A post‐Brexit perspective

Author

Listed:
  • Swati Dhingra
  • Gianmarco Ottaviano
  • Veronica Rappoport
  • Thomas Sampson
  • Catherine Thomas

Abstract

Leaving the EU will reshape the UK's economic relations with the rest of the world. This paper summarizes the findings of recent research studying the UK's role in the global economy, and the consequences of Brexit for UK trade, investment, and living standards. We emphasize that international integration affects investment and labour flows as well as trade in goods and services. There are important interdependencies between different forms of integration that should be accounted for when evaluating policy changes. Brexit is likely to make the UK poorer by reducing trade and investment flows, but the magnitude of the economic decline will depend upon the nature of the UK's post‐Brexit economic relations with the EU and the rest of the world. We conclude by considering options for UK‐EU relations after Brexit and how the UK should approach future trade negotiations. La salida de la UE reformará las relaciones económicas del Reino Unido con el resto del mundo. Este artículo resume los hallazgos de investigaciones recientes que estudian el papel del Reino Unido en la economía global y las consecuencias de Brexit para el comercio, la inversión y los niveles de vida en el Reino Unido. El artículo pone de relieve que la integración internacional afecta los flujos de inversión y de mano de obra, así como el comercio de bienes y servicios. Existen interdependencias importantes entre las diferentes formas de integración que se deben tener en cuenta al evaluar los cambios en las políticas. Es probable que Brexit haga más pobre al Reino Unido a causa de la reducción de los flujos de comercio e inversión, pero la magnitud de la disminución económica dependerá de la naturaleza de las relaciones económicas post‐Brexit del Reino Unido con la UE y el resto del mundo. Las conclusiones sopesan las opciones para las relaciones post‐Brexit entre el Reino Unido y la UE y cómo debería el Reino Unido abordar las futuras negociaciones sobre comercio. EU離脱は、イギリスが諸外国との経済関係を再構築するということを意味する。本稿では、イギリスの世界経済における役割に関する最近の研究の知見、ブレグジッド(Brexit:イギリスのEU離脱)がイギリスの貿易、投資、生活水準にもたらした影響を要約する。我々は、国際統合が、投資、労働力フロー、そして物品およびサービス取引に影響することを強調する。政策転換の評価を行う際に考慮に入れるべき、異なる統合形式間の大きな相互依存性が存在する。ブレグジッドは取引と投資フローを減少させイギリスをより貧しくする可能性が高いが、経済の衰退の規模は、ブレグジッド後のEUとその他の諸外国との経済関係の性質に依存すると考えられる。最後にブレグジッド後のイギリスとEUの関係として考えられる選択肢と、イギリスが今後の貿易交渉にどのようなアプローチをとるべきか考察する。

Suggested Citation

  • Swati Dhingra & Gianmarco Ottaviano & Veronica Rappoport & Thomas Sampson & Catherine Thomas, 2018. "UK trade and FDI: A post‐Brexit perspective," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 9-24, March.
  • Handle: RePEc:bla:presci:v:97:y:2018:i:1:p:9-24
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    Cited by:

    1. repec:eee:phsmap:v:523:y:2019:i:c:p:1175-1182 is not listed on IDEAS
    2. Brautzsch, Hans-Ulrich & Holtemöller, Oliver, 2019. "Potential international employment effects of a hard Brexit," IWH Discussion Papers 4/2019, Halle Institute for Economic Research (IWH).

    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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