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UK Trade Policy Observatory receives grant for research into post-Brexit trade and investment

The Economic and Social Research Council has awarded the UK Trade Policy Observatory a grant for “Post-Brexit trade and investment: explaining the issues, formulating trade agreements and understanding the effect on UK foreign direct investment”. The project aims to advance public understanding of, and strengthen policy-making engagement with, these key elements of the Brexit process.

Over the course of this nine-month project, commencing on 1 May, the UKTPO will explain crucial issues surrounding post-Brexit trade, explore the impact of Brexit on foreign direct investment, and develop new guidance for prioritising Free Trade Agreements.

There are three strands to this project:

Video Explainers. Since early 2017, the UKTPO has produced four three-minute animated videos that help to explain the fundamental issues and effects of Brexit. These videos have enabled complex issues to be presented in an engaging and comprehensible manner to a wide audience. The UKTPO will produce four new animated video explainers on a variety of trade-related issues.

Brexit and Foreign Direct Investment. UKTPO research has already shown that, after the referendum, aggregate FDI declined relative to expectations. New research will extend this work by disentangling decisions deriving from the general uncertainty of the Brexit process from those reflecting the erosion of the UK's attraction as an export-platform. In addition, firms' investment in the UK will be compared with elsewhere (EU and non-EU) and differences between Greenfield FDI and M&A FDI will be explored. 

Rules of Thumb for prioritising FTAs. This research aims to provide a discussion of the theoretical and empirical basis on which certain conditions favour the chances of a trade agreement being welfare-enhancing. The indicators developed will be operationalised in the latest version of the TradeSift software, which was developed by several UKTPO Fellows. The intended users are government officials with time and budget pressures, think tank analysts and academics teaching non-modelling courses.

Impact and outreach

The UK Trade Policy Observatory (UKTPO), led by Professor L. Alan Winters, is a partnership between the University of Sussex and Chatham House. The UKTPO draws together the largest group of academic expertise on the world trading system, with specialists in economics, law, international relations, business and management.

The UKTPO strives to input directly into policy making and engage with key policymakers as well as with those who scrutinise government and can influence policy through parliament and the specialist media. The UKTPO will work in collaboration with UK in a Changing Europe to communicate the outputs of this project.

The outcomes of this research will benefit a range of people and institutions, including policymakers, businesses, trade unions, academics and the general public.

By: George Meredith
Last updated: Wednesday, 1 May 2019