Trade Disintegration and Agri-Food Trade: United Kingdom Exit From EU

Abstract

This study provides a comprehensive analysis of the impact of the Trade and Cooperation Agreement (TCA) on the United Kingdom's agri-food trade post-Brexit. Utilising a difference in differences (DiD) methodology, we find a significant decline in both the value and quantity of UK agri-food exports and imports post-TCA, with prices increasing due to additional trade costs imposed by worsened market access and additional border checks. This disruption in trade underscores the necessity for policy interventions to mitigate the adverse effects of the TCA, particularly for maintaining market competitiveness and addressing the specific challenges faced by importers. The study also highlights the importance of legal enforceability in trade agreements, especially concerning agricultural and sanitary and phytosanitary (SPS) provisions, to facilitate market access and enhance trade volumes. Deepening TCA to the Agriculture Extra agreement with legal enforceability would substantially mitigate the trade disruption.