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It is worth noting that the paper above assumes the EU and UK would apply minimum, not maximum WTO Tariff rates. Assuming these tariffs feed directly into prices results in the following impacts on EU UK trade depending on which assumptions for price elasticity are made for each sector:

Median elasticity assumption results in a  fall  in  EU  to UK trade by  30% and a 22% reduction in UK to EU trade. The mean elasticities  are  slightly  higher  and  would  generate falls of 37% in EU-UK trade and 27% in UK-EU trade. The upper and lower bounds of the estimates are  given by the maximum elasticity estimates which would generate trade falls of 56% and 45% in EU-UK and UK-EU  trade respectively  and  the minimum  estimates  would result in trade declines of  17% and 12% respectively.

These are massive reductions in trade and are based on Minimum WTO tariffs.

And non of the above takes into account the effect of devaluation, which will devastate EU-UK trade much further.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Aug 21st, 2017 at 06:33:15 PM EST
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