Dr Huw Edwards, of Loughborough University’s School of Business and Economics, and Dr Mustapha Douch, of the Edinburgh University Business School, have submitted written evidence to the Lords’ committee following the launch of an inquiry into trade in goods between Great Britain and the EU.
Their evidence is based on the findings of a recently published paper, The bilateral trade effects of announcement shocks: Brexit as a natural field experiment, which compares the effects of Brexit upon UK traders’ behaviour, based upon comparison with trade between other pairs of countries.
The key points are:
- Brexit began to affect UK exports earlier than most other studies suggested: starting around the 2015 general election
- Anticipation of Brexit reduced exports to the EU countries by 25% already by 2018, compared to what we would otherwise have expected. This is a much larger effect than the 15% long-run effect which the Office For Budgetary Responsibility is currently assuming (2), which underlies the recent Budget
- Anxiety about the future competitiveness of the UK also reduced exports to non-EU countries by about 15%. This is because UK exporters are mostly dependent upon EU supply chains
The House of Lords European Affairs Committee, chaired by Lord Kinnoull, launched the inquiry in September.
It followed the decision by the UK Government to further delay the introduction of new import controls on goods entering GB from the EU, which will not now be introduced until 1 July 2022.
The inquiry will examine the overall impact to date of Brexit and the Trade and Co-operation Agreement (TCA) on GB-EU trade in goods in both directions, in the UK’s first year outside the Single Market and Customs Union.
Read the Conversation article, Brexit fears started hitting UK trade as early as 2015 – new research, by Dr Edwards and Dr Douch, published last month.