The impact of the Trade and Cooperation Agreement on UK trade
brexit
New econometric evidence that the UK-EU Trade and Cooperation Agreement cut UK exports to the EU by over 22% and shrank export product variety.
With Jun Du, this piece sets out econometric evidence that the Trade and Cooperation Agreement, in force since January 2021, is a major driver of the UK’s weak trade performance — not a neutral continuity arrangement. Exports to the EU came in 22.1% lower and imports 9.5% lower than a no-Brexit counterfactual would predict, and the UK lost an estimated 20–42% of its export product variety over the first fifteen months, with small firms in manufacturing regions hit hardest.
Originally published on UK in a Changing Europe, June 14, 2023.