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Quantifying Non-Tariff Barriers: Brexit, Input Sourcing and Firm Performance

Author

Listed:
  • Gustaf Dillner
  • Rebecca Freeman
  • Kalina B. Manova
  • Thomas Sampson

Abstract

How successful is European integration in removing non-tariff trade barriers? We study how Brexit affected UK firms' input sourcing and sales. The post-Brexit Trade and Cooperation Agreement (TCA) reduced sales and input expenditure at firms with higher pre-Brexit EU trade exposure. It also caused firms to switch towards domestic and non-EU inputs. Through the lens of a trade model, the switch in input sourcing implies the TCA increased trade costs on EU imports by 21% and raised unit production costs by 3.1% for the average UK importer. Our results indicate EU membership secures large reductions in trade costs.

Suggested Citation

  • Gustaf Dillner & Rebecca Freeman & Kalina B. Manova & Thomas Sampson, 2026. "Quantifying Non-Tariff Barriers: Brexit, Input Sourcing and Firm Performance," CESifo Working Paper Series 13007, CESifo.
    • Handle: RePEc:ces:ceswps:_13007
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp13007.pdf
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    More about this item

    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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