How big a drop in agricultural exports to the United Kingdom after Brexit? Simulations for sensitive products of four Visegrad countries

Abstract

After the European Union (EU) was left by the United Kingdom (UK), a free trade area was established between these economies. Although bilateral trade in all goods is tariff-free, regulatory requirements make exports more costly and burdensome. We used a partial equilibrium model to analyze the implications of Brexit for agricultural exports from Visegrad countries (Czechia, Hungary, Poland and Slovakia). We assess trade creation and trade diversion effects resulting from an increase in non-tariff measures and border costs for 4-digit agricultural products identified as sensitive in each of the Visegrad countries. The simulations reveal that exports of sensitive products from Visegrad countries to the UK could decrease by up to 20%. While the macroeconomic importance of this change is not significant, for the producers of the sensitive goods such export losses are substantial.

Unraveling the key drivers of community composition in the agri-food trade network

“…Particularly noteworthy is the reduction in France’s market share, mainly due to a loss in country’s competitiveness 66 . Similarly, Great Britain faced a significant drop in its ranking over time and, its future behaviour may be also affected by the implications of the Brexit Agreement regarding agricultural exports 67 .…”

Evolution and Resilience of agri-food trade network

“…In particular, it is noticeable the reduction in the French market share, mainly due to a loss in country's competitiveness 52 . Similarly, also Great Britain has been characterised by a strong reduction in the ranking over time and future behaviour can be also affected by the implications of the Brexit Agreement in regard to agricultural exports 53 . According to import, in 2020, China was the leading importer of agricultural goods worldwide, followed by the United States and Germany.…”