This paper estimates the impact of U.S. trade remedy (TR) actions on agricultural trade from 1990 to 2014. Most previous studies of the effects of TR actions have left out agricultural products. We use a four-country oligopolistic trade model to study the impact of TR duties on imports from non-named countries, and we improve on methodological issues present in earlier studies. Our empirical results show that TR investigations benefit non-named foreign exporters and U.S. imports from non-named countries increase even before the implementation of a TR duty. The extent of trade diversion is positively related to the size of the duty. Moreover, we find evidence of an initiation effect revealed by a significant increase in imports from non-named countries that did not previously trade the relevant product with the United States. The considerable extent of trade diversion in agriculture provides robust evidence for leakage effects of TR laws which has a detrimental impact on their protective effect.
{"title":"Trade Diversion and the Initiation Effect: A Case Study of U.S. Trade Remedies in Agriculture","authors":"C. Carter, S. Steinbach","doi":"10.3386/w24745","DOIUrl":"https://doi.org/10.3386/w24745","url":null,"abstract":"This paper estimates the impact of U.S. trade remedy (TR) actions on agricultural trade from 1990 to 2014. Most previous studies of the effects of TR actions have left out agricultural products. We use a four-country oligopolistic trade model to study the impact of TR duties on imports from non-named countries, and we improve on methodological issues present in earlier studies. Our empirical results show that TR investigations benefit non-named foreign exporters and U.S. imports from non-named countries increase even before the implementation of a TR duty. The extent of trade diversion is positively related to the size of the duty. Moreover, we find evidence of an initiation effect revealed by a significant increase in imports from non-named countries that did not previously trade the relevant product with the United States. The considerable extent of trade diversion in agriculture provides robust evidence for leakage effects of TR laws which has a detrimental impact on their protective effect.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126585750","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Science has been traditionally characterized as an objective discipline that is free of values and which leads to definitive knowledge. In the GATT/WTO system, science has been elevated as the ultimate arbiter of international trade disputes. This article intends to critically evaluate, and re-conceptualize, the role of science in distinguishing disguised trade protectionism and legitimate government regulation. Drawing insights from psychology and behavioural science, the article first sets forth two normative principles that should be followed where science is to be used as an arbiter in trade disputes. It then proceeds to examine to what extent the current WTO case law has deviated from these normative principles. The article concludes that WTO Members enjoy wide discretion to address pervasive scientific uncertainty. Nevertheless, it remains possible that a rigorous use of science will bring WTO rules into direct conflict with national democracy in some highly value-laden and politically sensitive disputes.
{"title":"Re-Conceptualising the Role of Science in International Trade Disputes","authors":"Ming Du","doi":"10.54648/trad2018030","DOIUrl":"https://doi.org/10.54648/trad2018030","url":null,"abstract":"Science has been traditionally characterized as an objective discipline that is free of values and which leads to definitive knowledge. In the GATT/WTO system, science has been elevated as the ultimate arbiter of international trade disputes. This article intends to critically evaluate, and re-conceptualize, the role of science in distinguishing disguised trade protectionism and legitimate government regulation. Drawing insights from psychology and behavioural science, the article first sets forth two normative principles that should be followed where science is to be used as an arbiter in trade disputes. It then proceeds to examine to what extent the current WTO case law has deviated from these normative principles. The article concludes that WTO Members enjoy wide discretion to address pervasive scientific uncertainty. Nevertheless, it remains possible that a rigorous use of science will bring WTO rules into direct conflict with national democracy in some highly value-laden and politically sensitive disputes.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"66 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116009966","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter considers whether China has embarked on a path to WTO leadership since its historic accession in 2001. I argue that China is increasingly displaying the will to lead, an essential prerequisite for state leadership. China has become progressively more proactive, making independent proposals, joining undertakings initiated by other members, submitting numerous notifications, and regularly filing formal dispute settlement complaints despite its historical aversion to international adjudication. But does its growing participation signal leadership? China's trajectory towards WTO leadership is analyzed by identifying signs of its will to lead in the WTO--in its rhetoric, its participation and its initiatives. I maintain that indications of China's will to lead are evident, for example, in its strong support of globalization and the multilateral trading system (not trivial given US policy since the advent of Trump), China's continuing endorsement of the Doha Round negotiations (in contrast to other members that have declared the talks dead), and its initiation of talks on investment facilitation and active participation in talks on electronic commerce, among other things. At the same time, other factors are holding it back. For one, it is still learning how to lead in the WTO, despite moving considerably up the learning curve. More significantly, evidence of the willingness of other members to follow is presently limited. The essay aims at offering insight into China's behavior as a leader in the WTO, and the future leadership role China may play in the changing international trade environment, in which China paradoxically is taking over as the champion of an open global trading system, and possibly replacing US leadership in global economic governance.
{"title":"China and the WTO: On a Path to Leadership?","authors":"Marcia Don Harpaz","doi":"10.2139/ssrn.3178754","DOIUrl":"https://doi.org/10.2139/ssrn.3178754","url":null,"abstract":"This chapter considers whether China has embarked on a path to WTO leadership since its historic accession in 2001. I argue that China is increasingly displaying the will to lead, an essential prerequisite for state leadership. China has become progressively more proactive, making independent proposals, joining undertakings initiated by other members, submitting numerous notifications, and regularly filing formal dispute settlement complaints despite its historical aversion to international adjudication. \u0000But does its growing participation signal leadership? China's trajectory towards WTO leadership is analyzed by identifying signs of its will to lead in the WTO--in its rhetoric, its participation and its initiatives. I maintain that indications of China's will to lead are evident, for example, in its strong support of globalization and the multilateral trading system (not trivial given US policy since the advent of Trump), China's continuing endorsement of the Doha Round negotiations (in contrast to other members that have declared the talks dead), and its initiation of talks on investment facilitation and active participation in talks on electronic commerce, among other things. At the same time, other factors are holding it back. For one, it is still learning how to lead in the WTO, despite moving considerably up the learning curve. More significantly, evidence of the willingness of other members to follow is presently limited. The essay aims at offering insight into China's behavior as a leader in the WTO, and the future leadership role China may play in the changing international trade environment, in which China paradoxically is taking over as the champion of an open global trading system, and possibly replacing US leadership in global economic governance.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"311 ","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120871383","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
So long as the UK government liberates itself from the protectionist mindset of the EU and reduces trade barriers after Brexit, and UK businesses respond positively to the challenge of increased international competition (through increased productivity), the prospects for UK trade and prosperity post-Brexit are very bright indeed. The EU itself acknowledges that 90% of future growth in global GDP will be outside the EU. The costs of remaining in the EU are very high and not all purely economic: the EU is no longer a force for global liberalisation. On the basis of both international and EU law, the monetary costs to the UK of leaving the EU should be fairly low. Similarly, the frictional costs to both the UK and the EU of their post-Brexit relationship should also be low. However, as a consequence of both the concessions made to date by the UK in order to demonstrate its goodwill and the hard line taken by the EU in order to discourage other member states from leaving, these costs could well end up being much higher than they need be for both sides. Of particular concern is the EU’s ‘level playing field’ demand, laid out in its negotiating Guidelines for a future trading relationship. This would effectively prevent the UK from achieving regulatory autonomy or from pursuing an independent trade policy.
{"title":"How Bright are the Prospects for UK Trade and Prosperity Post-Brexit?","authors":"D. Blake","doi":"10.22381/JSME8120201","DOIUrl":"https://doi.org/10.22381/JSME8120201","url":null,"abstract":"So long as the UK government liberates itself from the protectionist mindset of the EU and reduces trade barriers after Brexit, and UK businesses respond positively to the challenge of increased international competition (through increased productivity), the prospects for UK trade and prosperity post-Brexit are very bright indeed. The EU itself acknowledges that 90% of future growth in global GDP will be outside the EU. The costs of remaining in the EU are very high and not all purely economic: the EU is no longer a force for global liberalisation. On the basis of both international and EU law, the monetary costs to the UK of leaving the EU should be fairly low. Similarly, the frictional costs to both the UK and the EU of their post-Brexit relationship should also be low. However, as a consequence of both the concessions made to date by the UK in order to demonstrate its goodwill and the hard line taken by the EU in order to discourage other member states from leaving, these costs could well end up being much higher than they need be for both sides. Of particular concern is the EU’s ‘level playing field’ demand, laid out in its negotiating Guidelines for a future trading relationship. This would effectively prevent the UK from achieving regulatory autonomy or from pursuing an independent trade policy.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"57 5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132185467","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-04-24DOI: 10.5771/9783845293349-379
A. Sanchez-Graells
In this paper, I reflect on the main types of gains derived from the regulation of public procurement in the context of the EU internal market that are at stake post-Brexit. Despite the difficulties in identifying and quantifying advantages derived from EU procurement rules, I submit that they can be seen as a major enterprise in (i) dismantling non-tariff barriers to trade in public markets, (ii) fostering administrative cooperation as a trade-facilitation strategy, and (iii) boosting the enforceability of a rules-based system. On this basis, I suggest that a future EU-UK Free Trade Agreement covering public procurement should prioritise collaboration aimed at (i) preventing the reappearance non-tariff barriers, (ii) fostering continued administrative cooperation, and (iii) retaining the enforceability of the rules of the future EU-UK FTA. I conclude with some thoughts on the peculiar dynamics that can ensue in the negotiation of a future EU-UK FTA.
{"title":"EU-UK Procurement-Based Trade Relations After Brexit: Some Thoughts","authors":"A. Sanchez-Graells","doi":"10.5771/9783845293349-379","DOIUrl":"https://doi.org/10.5771/9783845293349-379","url":null,"abstract":"In this paper, I reflect on the main types of gains derived from the regulation of public procurement in the context of the EU internal market that are at stake post-Brexit. Despite the difficulties in identifying and quantifying advantages derived from EU procurement rules, I submit that they can be seen as a major enterprise in (i) dismantling non-tariff barriers to trade in public markets, (ii) fostering administrative cooperation as a trade-facilitation strategy, and (iii) boosting the enforceability of a rules-based system. On this basis, I suggest that a future EU-UK Free Trade Agreement covering public procurement should prioritise collaboration aimed at (i) preventing the reappearance non-tariff barriers, (ii) fostering continued administrative cooperation, and (iii) retaining the enforceability of the rules of the future EU-UK FTA. I conclude with some thoughts on the peculiar dynamics that can ensue in the negotiation of a future EU-UK FTA.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128436264","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The international discussion of Trump's dispute over import tariffs for steel, aluminum and even cars are so far focused on the big global players. However, smaller African countries in particular could suffer too from the planned punitive tariffs, analogous to the famous African proverb, "When elephants fight, it is the grass that suffers". Egypt and South Africa for example, the potentially most affected countries in Africa, face massive job losses and earning opportunities, with all the consequences that this entails for their already fragile economy and their population in dire poverty.
{"title":"Trump's Protective Tariffs and Their Impact on Africa","authors":"D. Kohnert","doi":"10.2139/ssrn.3157328","DOIUrl":"https://doi.org/10.2139/ssrn.3157328","url":null,"abstract":"The international discussion of Trump's dispute over import tariffs for steel, aluminum and even cars are so far focused on the big global players. However, smaller African countries in particular could suffer too from the planned punitive tariffs, analogous to the famous African proverb, \"When elephants fight, it is the grass that suffers\". Egypt and South Africa for example, the potentially most affected countries in Africa, face massive job losses and earning opportunities, with all the consequences that this entails for their already fragile economy and their population in dire poverty.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121716083","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Israeli manufactured export performance has been on a growth path for the past two decades. This growth is partly due to the continuing shift in Israeli export specialization patterns from traditional products towards technology-intensified exports. However, Israel’s strong export competitiveness also derives from proliferating free trade agreements (FTAs) with its trading partners, especially the European Union (EU). This article analyses export statistics to provide data validating the positive impact of recent FTAs on Israel’s export comparative advantages across all sectors between 1995 and 2015. It employs an econometric framework to examine stability and specialization trends, as well as convergence. Furthermore, the authors add to the literature by performing a survival analysis, using the Kaplan-Meier Survival Rate model, to identify particular Israeli export sectors that have benefited from a longer period of competitive advantage than other sectors due to the EU-Israel Association Agreement.
{"title":"Export Competitiveness and Trade Agreements: Analysis and Insights from Israel's Experience","authors":"Eyal Ronen, Y. Benizri","doi":"10.54648/gtcj2018019","DOIUrl":"https://doi.org/10.54648/gtcj2018019","url":null,"abstract":"Israeli manufactured export performance has been on a growth path for the past two decades. This growth is partly due to the continuing shift in Israeli export specialization patterns from traditional products towards technology-intensified exports. However, Israel’s strong export competitiveness also derives from proliferating free trade agreements (FTAs) with its trading partners, especially the European Union (EU). This article analyses export statistics to provide data validating the positive impact of recent FTAs on Israel’s export comparative advantages across all sectors between 1995 and 2015. It employs an econometric framework to examine stability and specialization trends, as well as convergence. Furthermore, the authors add to the literature by performing a survival analysis, using the Kaplan-Meier Survival Rate model, to identify particular Israeli export sectors that have benefited from a longer period of competitive advantage than other sectors due to the EU-Israel Association Agreement.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"162 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123132874","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A two-part model is estimated to see if increasing returns and comparative advantage are empirically equivalent in explaining intra-industry trade. The model has separate mechanisms for determining the occurrence and the extent of intra-industry trade. Estimation is based on an augmented Grubel-Lloyd index derived from the data set on SITC 7 goods at the 3-digit SITC (Revision 4) for country pairs in which Korea is fixed as a source country. Estimation results show that both increasing returns and comparative advantage can explain the occurrence and the extent of intra-industry trade.
{"title":"Equivalence between Increasing Returns and Comparative Advantage as the Determinants of Intra-Industry Trade: An Industry Analysis for Korea","authors":"Honggue Lee","doi":"10.2139/ssrn.3151397","DOIUrl":"https://doi.org/10.2139/ssrn.3151397","url":null,"abstract":"A two-part model is estimated to see if increasing returns and comparative advantage are empirically equivalent in explaining intra-industry trade. The model has separate mechanisms for determining the occurrence and the extent of intra-industry trade. Estimation is based on an augmented Grubel-Lloyd index derived from the data set on SITC 7 goods at the 3-digit SITC (Revision 4) for country pairs in which Korea is fixed as a source country. Estimation results show that both increasing returns and comparative advantage can explain the occurrence and the extent of intra-industry trade.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"63 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133299225","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-03-27DOI: 10.11575/SPPP.V11I0.43342
G. Fellows, Trevor Tombe
In the 19th century, building the Canadian Pacific Railroad was a crucial element for successful and profitable trade between populated and developing portions of southern Canada. In the 21st century, that crucial element could be a northern corridor that eases east-west trade through Canada’s North. Two recent Senate reports, supported by federal Transportation Minister Marc Garneau, concluded such a project could “unlock significant economic opportunities for our Country.” We explore this possibility. Canada’s North relies heavily on imports for many important goods and services, especially manufactured products, agricultural goods, and professional and scientific services. While imports account for 28 per cent of spending for Canadian provinces, that figure stands at 35 per cent for the Yukon, 39 per cent for the Northwest Territories and 40 per cent for Nunavut. Exports are also critical, especially for the Northern resource sector, which exports 80 per cent of production compared to 66 per cent for the provinces. But due to its vast geography, sparse population, challenging weather and poor trade infrastructure, the costs of trading are large; the gains liberalization equally so. In this paper, we summarize recent analysis that quantified the magnitude and consequences of trade costs with and between Canada’s territories. We find that while distance matters, it matters much more for the territories. Specifically, we find the per-mile trade costs are 45 per cent larger for the territories than the provinces, suggesting lower quality infrastructure is an important cause. The gains from lowering such costs are large. We find the combined annual GDP of Nunavut, Yukon and the Northwest Territories could increase by nearly $4.7 billion – a massive increase of roughly 50%. A northern corridor providing better trade infrastructure would benefit provinces and territories alike. And while the initial outlay for northern infrastructure including multiple transportation modes would be significant, the long-term gains in GDP may justify such costs.
{"title":"Gains from Trade for Canada's North: The Case for a Northern Infrastructure Corridor","authors":"G. Fellows, Trevor Tombe","doi":"10.11575/SPPP.V11I0.43342","DOIUrl":"https://doi.org/10.11575/SPPP.V11I0.43342","url":null,"abstract":"In the 19th century, building the Canadian Pacific Railroad was a crucial element for successful and profitable trade between populated and developing portions of southern Canada. In the 21st century, that crucial element could be a northern corridor that eases east-west trade through Canada’s North. Two recent Senate reports, supported by federal Transportation Minister Marc Garneau, concluded such a project could “unlock significant economic opportunities for our Country.” We explore this possibility. Canada’s North relies heavily on imports for many important goods and services, especially manufactured products, agricultural goods, and professional and scientific services. While imports account for 28 per cent of spending for Canadian provinces, that figure stands at 35 per cent for the Yukon, 39 per cent for the Northwest Territories and 40 per cent for Nunavut. Exports are also critical, especially for the Northern resource sector, which exports 80 per cent of production compared to 66 per cent for the provinces. But due to its vast geography, sparse population, challenging weather and poor trade infrastructure, the costs of trading are large; the gains liberalization equally so. In this paper, we summarize recent analysis that quantified the magnitude and consequences of trade costs with and between Canada’s territories. We find that while distance matters, it matters much more for the territories. Specifically, we find the per-mile trade costs are 45 per cent larger for the territories than the provinces, suggesting lower quality infrastructure is an important cause. The gains from lowering such costs are large. We find the combined annual GDP of Nunavut, Yukon and the Northwest Territories could increase by nearly $4.7 billion – a massive increase of roughly 50%. A northern corridor providing better trade infrastructure would benefit provinces and territories alike. And while the initial outlay for northern infrastructure including multiple transportation modes would be significant, the long-term gains in GDP may justify such costs.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122712781","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The Whitehall Briefing (leaked in January but only officially released this month) is not the last word on the potential long-term economic impact of Brexit, despite claims from others that it ‘proves’ GDP will be lower in ‘all’ scenarios. As the report itself says, it is only ‘draft analytical thinking with preliminary results’, with many gaps and uncertainties. In particular, officials had not attempted to quantify the outcome that the government is actually seeking to achieve, including a new and comprehensive free trade deal with the EU that minimises both tariff and non-tariff barriers. Instead, the Briefing only looks at three alternative trade scenarios based on existing precedents. It does suggest that the UK might land somewhere in-between. But the outcome will depend on talks with the EU that have not yet even begun, as well as future policy choices to be made by HMG alone. For example, the Briefing recognises that the impact of leaving the Customs Union on customs barriers between the UK and EU could be anywhere between ‘high’ and ‘none’, depending on what new arrangements are agreed. Here, some have argued it is wrong to model something that the EU may not be willing to accept. But the purpose of scenario analysis is to look at a range of possible outcomes, not to close options down. Elsewhere, the Briefing includes only skimpy assessments of the scope for new trade deals with the rest of the world and for regulatory optimisation, and is too quick to dismiss the budget savings on payments to the EU. Overall, the ‘Cross Whitehall Briefing’ is an honest attempt to improve on the analysis published by the Treasury in 2016. But it is far from conclusive, and anyone claiming otherwise should read it again.
{"title":"Six gaps in Whitehall’s Brexit analysis","authors":"J. Jessop","doi":"10.2139/ssrn.3853679","DOIUrl":"https://doi.org/10.2139/ssrn.3853679","url":null,"abstract":"The Whitehall Briefing (leaked in January but only officially released this month) is not the last word on the potential long-term economic impact of Brexit, despite claims from others that it ‘proves’ GDP will be lower in ‘all’ scenarios. As the report itself says, it is only ‘draft analytical thinking with preliminary results’, with many gaps and uncertainties. In particular, officials had not attempted to quantify the outcome that the government is actually seeking to achieve, including a new and comprehensive free trade deal with the EU that minimises both tariff and non-tariff barriers. Instead, the Briefing only looks at three alternative trade scenarios based on existing precedents. It does suggest that the UK might land somewhere in-between. But the outcome will depend on talks with the EU that have not yet even begun, as well as future policy choices to be made by HMG alone. For example, the Briefing recognises that the impact of leaving the Customs Union on customs barriers between the UK and EU could be anywhere between ‘high’ and ‘none’, depending on what new arrangements are agreed. Here, some have argued it is wrong to model something that the EU may not be willing to accept. But the purpose of scenario analysis is to look at a range of possible outcomes, not to close options down. Elsewhere, the Briefing includes only skimpy assessments of the scope for new trade deals with the rest of the world and for regulatory optimisation, and is too quick to dismiss the budget savings on payments to the EU. Overall, the ‘Cross Whitehall Briefing’ is an honest attempt to improve on the analysis published by the Treasury in 2016. But it is far from conclusive, and anyone claiming otherwise should read it again.","PeriodicalId":426783,"journal":{"name":"PSN: Trade Policy (Topic)","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123163617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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