An assessment of analytical options for estimating regional impacts of UK trade agreements on agriculture

The UK is in the process of signing a raft of Free Trade Agreements (FTAs), with potentially large ramifications for domestic agricultural sectors. In Defra, we use a variety of trade models to establish the costs and benefits of such policies on UK consumers and agri-food producers. However, all our trade models aggregate impacts to the UK level. Given we expect production impacts in particular to be regionally concentrated, this is a significant limitation to understanding the overall impact of these FTAs. A variety of approaches could be adopted to estimate these impacts, from the more rudimentary to the more resource intensive. The costs and benefits of these approaches will be discussed. A recommended approach is set out. We examine the appropriateness of this at both a country level – England, Wales, Scotland, Northern Ireland – and at a more detailed regional level. This approach is then tested on an example Free Trade Agreement, the UK’s recent FTA with Australia.