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Consequences of Brexit and Options for a "Global Britain"

Author

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  • Steven Brakman
  • Harry Garretsen
  • Tristan Kohl

Abstract

The United Kingdom has opted to leave the European Union. The trade and welfare consequences of this decision are large; most studies predict a trade and welfare loss for both the UK and the EU. The UK parliament has indicated that it aims for new and ambitious trade agreements following Brexit, but has not been explicit what type of trade agreements it envisions (except that it should be broad) or with whom specifically. In this paper, we consider the UK’s options. We first confirm, in line with existing studies, that the negative trade consequences of Brexit are substantial, especially for the UK and also for the EU. After reviewing all potential options, we have a simple answer to the question whether the UK has an alternative for the existing trade agreement with the EU. The answer is: No. Only a trade agreement with the EU can compensate for the negative trade consequences of Brexit.

Suggested Citation

  • Steven Brakman & Harry Garretsen & Tristan Kohl, 2017. "Consequences of Brexit and Options for a "Global Britain"," CESifo Working Paper Series 6448, CESifo.
    • Handle: RePEc:ces:ceswps:_6448
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    Cited by:

    1. Swati Dhingra & Gianmarco Ottaviano & Veronica Rappoport & Thomas Sampson & Catherine Thomas, 2018. "UK trade and FDI: A post‐Brexit perspective," Papers in Regional Science, Wiley Blackwell, vol. 97(1), pages 9-24, March.
    2. Harald Oberhofer & Michael Pfaffermayr, 2021. "Estimating the trade and welfare effects of Brexit: A panel data structural gravity model," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 338-375, February.
    3. Hagemejer, Jan & Dunin-Wasowicz, Maria & Michalek, Jan & Szyszka, Jacek, 2020. "Trade-related effects of Brexit. Implications for Central and Eastern Europe," Conference papers 333187, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Dhingra, Swati & Machin, Stephen & Overman, Henry, 2017. "Local Economic Effects of Brexit," National Institute Economic Review, National Institute of Economic and Social Research, vol. 242, pages 24-36, November.
    5. Neary, Peter & Carrère, Céline & Mrázová, Monika, 2020. "Gravity without Apologies: The Science of Elasticities, Distance, and Trade," CEPR Discussion Papers 14473, C.E.P.R. Discussion Papers.
    6. Céline Carrère & Monika Mrázová & J Peter Neary, 2020. "Gravity Without Apology: the Science of Elasticities, Distance and Trade," The Economic Journal, Royal Economic Society, vol. 130(628), pages 880-910.
    7. Paola Fezzigna & Simone Borghesi & Dario Caro, 2019. "Revising Emission Responsibilities through Consumption-Based Accounting: A European and Post-Brexit Perspective," Sustainability, MDPI, vol. 11(2), pages 1-13, January.
    8. Bart Los & Marcel P. Timmer, 2020. "Measuring Bilateral Exports of Value Added: A Unified Framework," NBER Chapters, in: Challenges of Globalization in the Measurement of National Accounts, pages 389-421, National Bureau of Economic Research, Inc.
    9. Erdey, László & Gáll, József & Márkus, Ádám & Tőkés, Tibor, 2020. "Changes in the trade patterns of the UK in a global perspective," MPRA Paper 98110, University Library of Munich, Germany, revised 21 Jan 2020.
    10. Douglas Silveira & Izak Silva & Silvinha Vasconcelos & Fernando Perobelli, 2020. "The Brexit game: uncertainty and location decision," Papers in Regional Science, Wiley Blackwell, vol. 99(6), pages 1515-1538, December.
    11. André Wolf, 2019. "Der Brexit aus EU-Perspektive [The Brexit from an EU perspective]," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 99(10), pages 739-740, October.
    12. Kaan Celebi, 2021. "Quo Vadis, Britain? – Implications of the Brexit process on the UK’s real economy," International Economics and Economic Policy, Springer, vol. 18(2), pages 267-307, May.
    13. Tristan Kohl, 2019. "The Belt and Road Initiative’s effect on supply-chain trade: evidence from structural gravity equations," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 12(1), pages 77-104.
    14. Glückler Johannes & Wójcik Dariusz, 2023. "Seven Years of Brexit: Economic Geographies of Regional De- and Recoupling," ZFW – Advances in Economic Geography, De Gruyter, vol. 67(2), pages 67-75, August.
    15. Julia Grübler & Robert Stehrer, 2017. "Die Relevanz von nicht-tarifären Maßnahmen für den Außenhandel," FIW Policy Brief series 036, FIW.
    16. Peter A.G. van Bergeijk, 2019. "Deglobalization 2.0," Books, Edward Elgar Publishing, number 18560.
    17. Andrei HREBENCIUC, 2017. "The costs of Brexit for UK economy," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(611), S), pages 319-327, Summer.
    18. Harald Oberhofer & Michael Pfaffermayr & Yvonne Wolfmayr, 2021. "Die Auswirkungen des Brexit auf Österreichs Wirtschaft," WIFO Studies, WIFO, number 66782, April.

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    More about this item

    Keywords

    Brexit; Gravity Model; trade predictions;
    All these keywords.

    JEL classification:

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

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