Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245473 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9292
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The withdrawal of the United Kingdom from the European Union has had disruptive effects on international trade. As part of its 'Global Britain' strategy, in the wake of Brexit, the UK is pursuing a series of Free Trade Agreements with countries around the world, including Canada, Japan, Korea, Mexico, Norway, Switzerland, Turkey and possibly the United States. Closer to home, the UK is under mounting pressure to dissuade Scotland, Northern Ireland and Wales from seeking independence to regain the severed ties with the EU. We analyze the economic consequences of these scenarios with a state-of-the-art structural gravity model for major economies around the world. We find that 'Global Britain' yields insufficient trade creation to compensate for Brexit-induced trade losses. Our results also reveal that independence from the UK in itself would inflict greater post-Brexit economic harm on the devolved nations of Great Britain. Nevertheless, these effects could be entirely removed for each of these devolved nations conditional on a renewed trade deal with the EU.
Subjects: 
Brexit
gravity model
JEL: 
F13
F14
Document Type: 
Working Paper
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