Both the EU and the UK are significant actors in the trade and development arena. Changes to the relationship between the two can have significant spillover effects on developing country partners, who may not necessarily have a voice in the process.
The EU is a major export market for developing countries. It accounts for around 20% of all exports from low and middle income countries, a quarter of exports from both Sub-Saharan Africa and Low and Middle-Income South Asian countries, and close to 30 percent of exports from least developed countries. The UK, by virtue of its size and historical links to these regions, is a significant destination within the EU, accounting for between a fifth and a sixth of all exports to the EU from these regions. For some countries, such as Sri Lanka for example, the share can be a lot higher – between 30-40%.
The changing architecture for trade between the UK and the EU could affect these regions in several ways. Whereas exporters from these regions could previously access supply chains that operated seamlessly between the UK and the EU, that may well no longer be the case.
It is unclear as to how the UK will structure its future system of preferential tariffs, and how this relates to proposals – post Brexit – for unilateral liberalisation or an ambitious program of free trade areas.
On a longer term basis, the UK has been an important liberalising voice within the EU, on trade policy in general, and in relation to developing countries specifically. It was one of the driving forces behind the Everything But Arms initiative through which the EU gives tariff and quota free access to all products from LDCs. The future direction of EU trade policy, absent the UK, remains to be seen.
The articles in this section provide and overview of the many linkages that exist between Brexit and the trade/ development nexus. We hope they will help to keep these issues on the policy radar screen at a time when the intricacies of the exit talks, and talks on future arrangements understandably mobilise resources and energy.
Commentary
To launch our third season of Trade Knowledge Matters, our host, Amar Breckenridge discusses with Prof. David Luke, LSE and Colette van der Ven, Tulip Consulting the aftermath of the CoP28 in the United Arab Emirates. They dive into the impact of the CoP’s conclusions on Sub-Sahara African economies and their trade policies. The episode […]
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The European Union’s Carbon Border Adjustment Mechanism (CBAM) enters its initial transition phase in October 2023. The measure is part of the EU’s Green Deal and “Fit for 55” policy package, which aims to reduce Greenhouse Gas (GHG) emissions by 55% by 2030. Like many measures implemented in a “second-best” policy environment, it raises a […]
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Brexit negotiations between the UK and the EU create a “policy externality”. That is, their outcome will have effects on third parties that have no direct say in the negotiations. The scope for these externalities increases the more these parties are dependent on the UK and EU for their trade, and the bigger the share […]
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Donald Trump’s decision to repudiate the Joint Comprehensive Plan of Action agreed with Iran has not only precipitated a security crisis, it will also further ratchet up tensions in world trade. Trade is a fundamental part of the deal, for Iran, but also the European Union. In just two years, EU exports to Iran increased […]
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The Commonwealth Heads of Government Meeting (CHOGM 2015) in Malta on November 27-29 provides a unique opportunity for the new Liberal government to launch a comprehensive trade and development strategy as a defining feature in its commitment to re-engage in the world. Canada has proportionally more trade and development linkages with Commonwealth countries than any […]
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Authors: David Luke & Phil Rourke. The arrival of President-elect Donald Trump threw the Liberal Government’s trade strategy off balance. The recent reshuffling of Cabinet and the now laser-like focus on the United States, Canada’s most important commercial relationship, confirmed the need for a reboot. The first casualty of the change in strategy is […]
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Trade preferences are one of the issues that lie at the nexus between trade and development. This article discusses the Generalised Schedule of Preferences and some related issues for the UK to consider post-Brexit.
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This ICTSD article discusses the ways in which Brexit might impact Africa and Africa-UK relations?
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Brexit means the UK will need to negotiate new trade relations with the EU and third parties. This ICTSD article discusses how this could provide developing countries with opportunities to develop their trade relations with the UK.
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This ICTSD article discusses how policies on trade and markets can help to achieve the SDGs. It examines how policies affecting trade and markets are relevant to the new commitments on hunger and malnutrition; looks at past progress and projected trends; and examines options for government action in years ahead.
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