Fachbereich Wirtschaftswissenschaft

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07.02.2019

A costly Brexit? Deliberalisation of trade in services and its potential cost

Brexit will very likely lead to a de-liberalisation of trade in services. A new study by Valeria Merlo and Georg Wamser (joint with Sven Blank and Peter Egger) examines the consequences of this change for individual EU Member States.


Valeria Merlo (Professor of International Economics at the University of Tübingen), Georg Wamser (Professor of Economics at the University of Tübingen) and Sven Blank (Research economist at the Deutsche Bundesbank’s Research Centre), Peter H. Egger (Professor of Applied Economics at ETH Zurich) are the authors of the recent publication of the Deutsche Bundesbank about the costs of the Brexit. Read the Deutsche Bundesbank Research Brief and the respective RSIT working paper.

When it comes to trade in goods and services, the European Union (EU) is the United Kingdom’s most important partner. By the same token, the United Kingdom is also an important trading partner for the EU. The United Kingdom’s departure from the EU means that new market access arrangements need to be agreed between the two parties. These changes are likely to come with a hefty price tag for both sides. If we want to quantify these costs, though, it is not enough to simply look at goods transactions and traditional trade barriers such as customs tariffs to provide a quantitative picture of the possible repercussions of Brexit. Both the United Kingdom and individual EU Member States rank among the world’s most important exporters of services, which is why, in a new study, we investigate – among other issues – the potential costs of a de-liberalisation of trade in services.

When it comes to trade in goods and services, the European Union (EU) is the United Kingdom’s most important partner. By the same token, the United Kingdom is also an important trading partner for the EU. The United Kingdom’s departure from the EU means that new market access arrangements need to be agreed between the two parties. These changes are likely to come with a hefty price tag for both sides. If we want to quantify these costs, though, it is not enough to simply look at goods transactions and traditional trade barriers such as customs tariffs to provide a quantitative picture of the possible repercussions of Brexit. Both the United Kingdom and individual EU Member States rank among the world’s most important exporters of services, which is why, in a new study, we investigate – among other issues – the potential costs of a de-liberalisation of trade in services.

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