Academic Paper

Brexit Uncertainty and Trade Disintegration

Graziano, A.G., Handley, K,. Limão, N,. (2021) ‘Brexit Uncertainty and Trade Disintegration’, The Economic Journal, Volume 131, Issue 635, Pages 1150–1185,

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.

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Alejandro G. Graziano

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