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Impact of Brexit on the Utilization of Regional Trade Agreements: Evidence from Japan’s Imports

Author

Listed:
  • Hayakawa,Kazunobu

Abstract

After Brexit, the rules of origin specified in the Japan-European Union (EU) Economic Partnership Agreement (EPA) disallow the accumulation of inputs from the UK. Similarly, the Japan-United Kingdom (UK) EPA does not permit the accumulation of EU inputs in the export of certain products. Therefore, Brexit could have reduced the use of preferential tariffs established by these EPAs. We investigate this hypothesis by examining the utilization rates of the Japan-EU and Japan-UK EPAs for imports from the EU and the UK in Japan from 2019 to 2024. We found that Brexit did not significantly affect the utilization rates of the Japan-EU EPA for exports from European nations to Japan. Conversely, Brexit significantly adversely impacted EPA utilization rates for exporting products that did not allow the accumulation of EU inputs from the UK to Japan. However, this unfavorable effect was observed only in the first year of the Japan-UK EPA.

Suggested Citation

  • Hayakawa,Kazunobu, 2026. "Impact of Brexit on the Utilization of Regional Trade Agreements: Evidence from Japan’s Imports," IDE Discussion Papers 987, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper987
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    References listed on IDEAS

    as
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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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