POTENTIAL IMPACT OF WTO TARIFFS ON CROSS-BORDER TRADE. InterTradeIreland, 2019

Author, No (2019) POTENTIAL IMPACT OF WTO TARIFFS ON CROSS-BORDER TRADE. InterTradeIreland, 2019. [Working Paper]

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Abstract

The nature of the trade arrangements that will be in place following the exit of the UK from the EU is currently unknown and will be the subject of considerable negotiation over the coming years. To inform this process, it is useful to have information on the current trading patterns and how different elements of alternative trade arrangements might impact on overall trade flows and how these might be distributed across different sectors and products. Businesses across the island of Ireland are currently highly integrated with products potentially crossing the border multiple times during different stages of processing. It is therefore particularly exposed to even temporary disruptions to trade or increases in trading costs as a particularly closely knit example of the European single market. In the absence of a specific trade deal being agreed, the tariffs applied to third countries under World Trade Organisation (WTO) arrangements represent a fallback scenario for goods trade. Although this may be considered a worst case scenario, it is a useful exercise to examine the impact of these tariffs and other trade barriers in order to understand the parameters in which trade negotiations would operate. Trade in services does not have a similar fall-back set of tariffs or trade restrictions and data on services trade is more limited so this paper focuses entirely on goods trade.

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