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Brexit: estimating tariff costs for EU countries in a new trade regime with the UK

Author

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  • Rita Cappariello

    (Bank of Italy)

Abstract

This study estimates the average tariffs that the producers of each of the 27 EU countries could face when exporting to the UK in the event that a new Free Trade Agreement is not reached as part of the Brexit negotiation and that trade between the EU and the UK is conducted under WTO most-favoured-nation terms. The analysis is based on information from the WTO-IDB database and on bilateral trade flows at the product level published by UN Comtrade. The results show that average tariff costs would be different across EU countries, depending on the initial level of commercial relationships with the UK and on the sectoral composition of trade flows. Different tariff costs may potentially create a strong heterogeneity in the EU economies with regard to their stakes in the negotiations with the UK, and have an impact on the establishment of the EU position, to which each Member State contributes equally.

Suggested Citation

  • Rita Cappariello, 2017. "Brexit: estimating tariff costs for EU countries in a new trade regime with the UK," Questioni di Economia e Finanza (Occasional Papers) 381, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_381_17
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2017-0381/QEF_381_17.pdf
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    References listed on IDEAS

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    1. Olivier Cadot & Jaime de Melo, 2015. "Why OECD Countries Should Reform Rules of Origin," World Scientific Book Chapters, in: Developing Countries in the World Economy, chapter 16, pages 381-409, World Scientific Publishing Co. Pte. Ltd..
    2. João Amador & Rita Cappariello & Robert Stehrer, 2015. "Global Value Chains: A View from the Euro Area," Asian Economic Journal, East Asian Economic Association, vol. 29(2), pages 99-120, June.
    3. Martina Lawless & Edgar L. W. Morgenroth, 2019. "The product and sector level impact of a hard Brexit across the EU," Contemporary Social Science, Taylor & Francis Journals, vol. 14(2), pages 189-207, April.
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    Citations

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    Cited by:

    1. Eduardo Gutiérrez & Aitor Lacuesta & César Martín‐Machuca, 2024. "Brexit: Trade Diversion due to Trade Policy Uncertainty," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 86(5), pages 1058-1088, October.
    2. Bergin, Adele & Economides, Philip & Garcia-Rodriguez, Abian & Murphy, Gavin, 2019. "Ireland and Brexit: modelling the impact of deal and no-deal scenarios," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    3. Escaith, Hubert, 2018. "Mapping the UK domestic and global value chains from a Brexit perspective," MPRA Paper 87824, University Library of Munich, Germany.
    4. Alejandro Buesa & Coral García & Iván Kataryniuk & César Martín-Machuca & Susana Moreno & Moritz Roth, 2020. "Brexit: situation and economic consequences," Economic Bulletin, Banco de España, issue 4/2020.
    5. Massimiliano Pisani & Filippo Vergara Caffarelli, 2018. "What will Brexit mean for the British and euro-area economies? A model-based assessment of trade regimes," Temi di discussione (Economic working papers) 1163, Bank of Italy, Economic Research and International Relations Area.
    6. Patrick Bisciari, 2019. "A survey of the long-term impact of Brexit on the UK and the EU27 economies," Working Paper Research 366, National Bank of Belgium.
    7. Rita Cappariello & Milan Damjanovic & Michele Mancini & Filippo Vergara Caffarelli, 2018. "EU-UK global value chain trade and the indirect costs of Brexit," Questioni di Economia e Finanza (Occasional Papers) 468, Bank of Italy, Economic Research and International Relations Area.
    8. Rita Cappariello & Michele Mancini, 2019. "US trade policy in numbers: how exposed is the EU?," Questioni di Economia e Finanza (Occasional Papers) 528, Bank of Italy, Economic Research and International Relations Area.
    9. Antoine Berthou & Sophie Haincourt & Marie-Elisabeth de la Serve & Ángel Estrada & Moritz A. Roth & Alexander Kadow, 2019. "Assessing the macroeconomic impact of Brexit through trade and migration channels," Occasional Papers 1911, Banco de España.
    10. L´Hotellerie-Fallois, Pilar & Vergara Caffarelli, Filippo & Geeroms, Hans & de Almeida, Ana M. & Bisciari, Patrick & Byrne, Stephen & Campos, Rodolfo & Conefrey, Thomas & Cappariello, Rita & Damjanovi, 2020. "A review of economic analyses on the potential impact of Brexit," Occasional Paper Series 249, European Central Bank.

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    More about this item

    Keywords

    tariffs; protectionism; Brexit;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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