1. Analysing the impact of Brexit on trade and identifying export market potential Michael Gasiorek InterAnalysis

2. Possible impact of Brexit on trade:
How might trading relations change
Associated risks and opportunities
Mitigating against the risk
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3. Trading relations will change with:
The EU
The World Trade Organisation
50+ countries the EU has FTAs with
The countries the EU is negotiating with
Those the UK may want to sign agreements with: USA, China, Japan, India, Aus…
1: includes: Canada, Singapore, Malaysia, Vietnam, Thailand, Indonesia
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4. So what are the risks? Direct impact on exports or imports from:
Changes in tariffs
Changes in regulatory requirements or in documentation needed for conformity assessment
Rules of Origin
Indirect impact on investment
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5. How big are the risks? The EU: CU v FTA v MFN are very different 44%
Export share
Import share
The EU: CU v FTA v MFN are very different
44%
54%
50+ countries the EU has FTAs with
Countries the EU is negotiating with1
Those the UK may want to sign agreements with: USA, China, Japan, India, Aus…
1: includes: Canada, Singapore, Malaysia, Vietnam, Thailand, Indonesia
© InterAnalysis Ltd 2016

6. How big are the risks? The EU 44% 54%
Export share
Import share
The EU
44%
54%
50+ countries the EU has FTAs with
14%
12%
Countries the EU is negotiating with1
Those the UK may want to sign agreements with: USA, China, Japan, India, Aus…
1: includes: Canada, Singapore, Malaysia, Vietnam, Thailand, Indonesia
© InterAnalysis Ltd 2016

7. How big are the risks? The EU 44% 54%
Export share
Import share
The EU
44%
54%
50+ countries the EU has FTAs with
14%
12%
Countries the EU is negotiating with1 2%
Those the UK may want to sign agreements with: USA, China, Japan, India, Aus…
1: includes: Canada, Singapore, Malaysia, Vietnam, Thailand, Indonesia
© InterAnalysis Ltd 2016

8. How big are the risks? The EU 44% 54%
Export share
Import share
The EU
44%
54%
50+ countries the EU has FTAs with
14%
12%
Countries the EU is negotiating with1 2%
Those the UK may want to sign agreements with: USA, China, Japan, India, Aus…
25%
23%
1: includes: Canada, Singapore, Malaysia, Vietnam, Thailand, Indonesia
© InterAnalysis Ltd 2016

9. Assessing the risk for your industry:
Where do you currently export to?
Is there a risk that Brexit will lead to changing market access?
There is a big difference if you are exporting to:
Germany (part of the EU),
Korea (Free Trade Agreement), or
the US
© InterAnalysis Ltd 2016

10. Assessing the risk for your industry:
Where do you currently import from?
Could Brexit increase your import costs
Will you need to satisfy rules of origin?
Big difference between importing from:
Germany (part of the EU),
Korea (Free Trade Agreement), or
the US
© InterAnalysis Ltd 2016

11. Take the “vehicle” industry as an example…
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12. © InterAnalysis Ltd 2016

13. © InterAnalysis Ltd 2016

14. How big are the risks? The EU 44% 85%
Export share
Import share
The EU
44%
85%
50+ countries the EU has FTAs with 9% 7%
Countries the EU is negotiating with1 3% 1%
Those the UK may want to sign agreements with: USA, China, Japan, India, Aus…
33% 6%
1: includes: Canada, Singapore, Malaysia, Vietnam, Thailand, Indonesia
© InterAnalysis Ltd 2016

15. How big are the risks?
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16. How big are the risks?
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17. How big are the risks: tariffs
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18. Mitigating against the risks:
In which markets have UK exports gone up?
Are these markets where demand has gone up
Has the UK done better or worse than the change in demand
In which market have UK exports gone down?
How are these changes related to changes in demand
© InterAnalysis Ltd 2016

19. Looking at changes in vehicle exports:
Comparing 2011 with 2015
% Change in the UK’s exports to each country
Negative
Positive
% change in World demand in each country
RETREAT
DECLINING STAR
MISSED OPPORTUNITY
RISING STAR
In this cell both UK exports grew and world demand grew
© InterAnalysis Ltd 2016

20. Looking at changes in vehicle exports:
Comparing 2011 with 2015
% Change in the UK’s exports to each country
Negative
Positive
% change in World demand in each country 17 1
31.7%
1.2% 8 24
21.1%
46%
This is the no. of countries where both UK exports grew and world demand grew
© InterAnalysis Ltd 2016

21. Looking at changes in vehicle exports:
Comparing 2011 with 2015
% Change in the UK’s exports to each country
Negative
Positive
% change in World demand in each country 17 1
31.7%
1.2% 8 24
21.1%
46%
This is the no. of countries where both UK exports grew and world demand grew
This is the share of UK exports going to those 24 countries
© InterAnalysis Ltd 2016

22. Looking at changes in vehicle exports:
Comparing 2011 with 2015
% Change in the UK’s exports to each country
Negative
Positive
% change in World demand in each country 17 1
31.7%
1.2% 8
24 (19)
21.1%
46% (41.4%)
This is the no. of countries where UK exports grew by more than world demand
This is the share of UK exports going to those 19 countries
© InterAnalysis Ltd 2016

23. Looking at changes in vehicle exports:
Comparing 2011 with 2015
% Change in the UK’s exports to each country
Negative
Positive
% change in World demand in each country 17 1
31.7%
1.2% 8
24 (19)
21.1%
46% (41.4%)
In this cell world demand has grown but UK exports have decline = MISSED OPPORTUNITY
© InterAnalysis Ltd 2016

24. Looking at changes in vehicle exports:
Comparing 2011 with 2015
% Change in the UK’s exports to each country
Negative
Positive
% change in World demand in each country 17 1
31.7%
1.2% 8
24 (19)
21.1%
46% (41.4%)
The eight countries are:
Greece
Portugal
Finland
Norway
Turkey
Japan
Australia
China
In this cell world demand has grown but UK exports have decline = MISSED OPPORTUNITY
© InterAnalysis Ltd 2016