Brexit Uncertainty and Trade Disintegration
Graziano, A.G., Handley, K,. Limão, N,. (2021) ‘Brexit Uncertainty and Trade Disintegration’, The Economic Journal, pp 1150–1185, Issue 635, Volume 131
Published 20 July 2022
This paper provides an estimate of the uncertainty effects of preferential trade disagreements. Increases in the probability of Britain’s exit from the European Union (Brexit) reduce bilateral export values and trade participation. These effects are increasing in trade policy risk across products. The authors estimate that at the average disagreement tariff of 4.5% the increase in the probability of Brexit after the referendum lowered EU–UK bilateral export values between 11–20%. Neither the EU or UK exporters believed a trade war was likely.