Implications of Brexit to the Asia-Pacific region: with a focus on least developed countries

Jacob, Arun and Graham, Louis and Moller, Anders K (2017): Implications of Brexit to the Asia-Pacific region: with a focus on least developed countries. Published in: United Nations ESCAP Trade Insight No. 20 (3 March 2017)

Abstract

Brexit might affect exports of some countries in the Asia-Pacific region disproportionately more than others. Simulation results, under different Brexit scenarios, show that the potential reduction in trade faced by least developed countries (LDCs) of the region can range from 16% to 50% of their current export value to the UK in key sectors such as fish, clothes, textiles and footwear. Simulations also show that it is the larger developing countries from the region that would benefit from any trade diversion that ensues in these sectors. Countries with higher exposure to Brexit induced risks need to engage in deeper analyses of the extent of such impacts and brace themselves for proactive discussions with the UK in order to limit negative impacts.

• Item Type: MPRA Paper
• Language: English
• Keywords: Brexit, LDCs, trade diversion, trade policy
• Subjects: F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F17 - Trade Forecasting and Simulation; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy; P - Economic Systems > P4 - Other Economic Systems > P45 - International Trade, Finance, Investment, and Aid

References

Asian Development Bank (2016). Asia Bond Monitor, September 2016.

BBC News (2016). “Brexit: Theresa May to trigger Article 50 by end of March.” Web. Acc. 27/10/2016. <http://www.bbc.com/news/uk-politics-37532364>

Walker, Andrew (2016).” Can the UK take over existing EU trade agreements?” BBC News. Web. Acc. 27/10/2016. <http://www.bbc.com/news/business-37574598>

Cadman, Emily (2016). “Brexit would cut foreign direct investment by fifth, report says.” Financial Times. Web. Acc. 27/10/2016. <https://www.ft.com/content/252ebfd4-02dd-11e6-9cc4-27926f2b110c>

Cohen, Mike and Arabile Gumede (2016). “Analysis: Brexit and impact on Africa. Nightmares and opportunities.” Web. Acc. 26/10/2016. <http://www.biznews.com/africa/2016/06/28/analysis-Brexit-impact-africa-nightmares-opportunities/>

DfID (2015). Statistics on International Development. UK Government.

Dhingra, Swati, Gianmarco Ottaviano, Thomas Sampson, and John Van Reenen (2016) "The impact of Brexit on foreign investment in the UK." Centre for Economic Performance, London School of Economics and Political Science (LSE).

European Commission (2016). Generalised Scheme of Preferences (GSP). Web. Acc. 27/10/2016. <http://ec.europa.eu/trade/policy/countries-and-regions/development/generalised-scheme-of-preferences/>

Friedman, George (2016). 3 Reasons Brits Voted for Brexit. Web. Acc. 27/10/2016. http://www.forbes.com/sites/johnmauldin/2016/07/05/3-reasons-brits-voted-for-Brexit/2/#713b622a76ef

Joergen Oerstroem Moeller (2017). “Trump and Brexit: Some Lessons for Southeast Asia”, ISEAS Perspective, issue number 11.

Iskyan, Kim (2016a). “Brexit Could Have a Huge Impact on Asia -- Here's How.” The Street. Web. Acc. 27/10/2016. <https://www.thestreet.com/story/13619957/2/Brexit-could-have-a-huge-impact-on-asia-here-s-how.html>

Iskyan, Kim (2016b). “This is why a mass murder in Florida matters – a lot – to Asia.” TrueWealth Publishing. Web. Acc. 27/10/2016. <http://truewealthpublishing.asia/this-is-why-a-mass-murder-in-florida-matters-a-lot-to-asia/>

Jones, Emily (2016). “Brexit: Opportunity or peril for trade with small and poor developing economies?” International Centre for Trade and Sustainable Development. Web. Acc. 27/10/2016. <http://www.ictsd.org/opinion/Brexit-opportunity-or-peril-for-trade-with-small-and-poor-developing-economies>

Martin, Will (2016). “NOMURA: Brexit will cause widespread 'contagion' in Asia.” Business Insider. Web. Acc. 27/10/2016. http://uk.businessinsider.com/nomura-research-on-the-impact-of-Brexit-on-global-markets-2016-6

Max Mendez-Parra, Phyllis Papadavid and Dirk Willem te Velde (2016). “Brexit and development : How will developing countries be affected?”, ODI Briefing, July 2016.

Merrick, Rob (2016). “Brexit: Japan threatens to withdraw UK investment if ‘requests not met’ in EU deal.” The Independent (UK). Web. Acc. 27/10/2016. <http://www.independent.co.uk/news/uk/politics/Brexit-japan-companies-could-withdraw-uk-investment-eu-deal-requests-a7225996.html>

Moody’s (2016). “Brexit to have limited direct credit impact on Asia Pacific sovereigns.” Moody’s Investor Service. Web. Acc. 27/10/2016. <https://www.moodys.com/research/Moodys-Brexit-to-have-limited-direct-credit-impact-on-Asia--PR_351930 >

Panda, Ankit (2016). “Post-Brexit, What Are the Geopolitical and Economic Consequences for Asia?” The Diplomat. Web. Acc. 26/10/2016. http://thediplomat.com/2016/06/post-Brexit-what-are-the-geopolitical-and-economic-consequences-for-asia/

Simpson, Colin (2016). “What Brexit Would Mean for Asia's Economies.” Bloomberg. Web. Acc. 26/10/2016. <http://www.bloomberg.com/news/articles/2016-06-20/what-Brexit-would-mean-for-asia-s-economies>

Thirlwell, Mark (2016). Trade and Investment Note. Beyond Brexit: Potential implication for Australian trade and investment. Australian Government & Australia Unlimited.