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UK trade in the wake of Brexit


  • Rebecca Freeman
  • Kalina Manova
  • Thomas Prayer
  • Thomas Sampson


This paper studies the impact of Brexit on the UK's trade with the EU relative to its trade with the rest of the world. We find no evidence that uncertainty and anticipation effects led to a significant decline in relative UK trade with the EU during the period after the UK voted for Brexit in 2016 and before the change in policy was implemented under the new Trade and Cooperation Agreement (TCA) in 2021. However, the UK's departure from the EU's single market and customs union at the start of 2021 caused a major shock to UK-EU trade. We estimate that the new TCA trade relationship led to a sudden and persistent 25% fall in relative UK imports from the EU. In contrast, we find a smaller and only temporary decline in relative UK exports to the EU, but nevertheless a large and sustained drop in the extensive margin of exports, driven by the exit of low-value relationships. The timing and asymmetry of Brexit effects on UK imports and exports is puzzling and provides evidence of important differences in adjustment to integration and disintegration shocks.

Suggested Citation

  • Rebecca Freeman & Kalina Manova & Thomas Prayer & Thomas Sampson, 2022. "UK trade in the wake of Brexit," CEP Discussion Papers dp1847, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1847

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    References listed on IDEAS

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    Cited by:

    1. Juan de Lucio & Raúl Mínguez & Asier Minondo & Francisco Requena, 2023. "The negative impact of disintegration on trade: the case of Brexit," Working Papers 2302, Department of Applied Economics II, Universidad de Valencia.
    2. Jelliffe, Jeremy & Gerval, Adam & Husby, Megan & Jarrell, Philip & Williams, Brian, 2023. "United Kingdom Agricultural Production and Trade Policy Post-Brexit," USDA Miscellaneous 333547, United States Department of Agriculture.
    3. Bakker, Jan & Datta, Nikhil & Davies, Richard & De Lyon, Joshua, 2022. "Non-tariff barriers and consumer prices: evidence from Brexit," LSE Research Online Documents on Economics 118040, London School of Economics and Political Science, LSE Library.
    4. Swati Dhingra & Thomas Sampson, 2022. "Expecting Brexit," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 495-519, August.

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    More about this item


    Brexit; EU; exports; trade policy; globalisation; imports; uncertainty;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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