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The Impact of Hard Brexit on Polish Exports

Author

Listed:
  • Borowski Jakub

    (Collegium of World Economy, Warsaw School of Economics, Poland)

  • Olipra Jakub

    (Collegium of Economic Analysis, Warsaw School of Economics, Poland)

  • Błaszyński Paweł

    (Warsaw School of Economics, Poland)

Abstract

The decision of the United Kingdom (UK) to leave the European Union (EU) is unprecedented, especially considering the recent trend in the global economy toward economic integration. There is a multitude of research concerning the implications of economic integration; however, research in the field of disintegration is scarce. Brexit serves as an interesting case study to investigate the effects of economic disintegration. The implications for trade are especially fascinating as trade liberalization is one of the most important benefits of economic integration. Existing studies focus mainly on Brexit’s impact on the UK’s exports and imports, while less attention has been paid to Brexit’s effects on the trade of other countries. The main objective of our research is to estimate Brexit’s influence on Polish exports. We present several possible scenarios of future trade relations between the UK and the EU and assume that, at least in the nearest-future post-Brexit scenario, trade under the World Trade Organization rules is most likely. This will result in the imposition of tariffs on trade between the UK and the EU members, including Poland. In our research, we used the real exchange rate of the Polish zloty against the British pound as a proxy for the changes in price competitiveness of Polish exports due to the imposition of tariffs. We find that in the first year after Brexit, the dynamics of Polish exports to the UK will decrease due to the imposition of customs duties by 1.3 percentage points (pp) and by 0.1 pp when it comes to total Polish exports. This paper contributes to the discussion on the effects of disintegration on trade. We propose a new method for assessing changes in trade volume due to increase of trade barriers.

Suggested Citation

  • Borowski Jakub & Olipra Jakub & Błaszyński Paweł, 2018. "The Impact of Hard Brexit on Polish Exports," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 54(2), pages 99-109, June.
    • Handle: RePEc:vrs:ijomae:v:54:y:2018:i:2:p:99-109:n:2
    DOI: 10.2478/ijme-2018-0010
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    References listed on IDEAS

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    More about this item

    Keywords

    Brexit; international trade; European integration;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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