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Cumulative effects of Brexit and other UK and EU‐27 bilateral free‐trade agreements on the world’s wine markets

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  • Kym Anderson
  • Glyn Wittwer

Abstract

Since Britain accounts for a major share of the world’s wine imports, and EU member countries include the world’s major wine exporters, Brexit and subsequent UK and EU‐27 bilateral free‐trade agreements (FTAs) have the potential to disrupt wine markets globally. We use a model of the world’s national wine markets, projected to 2025, to examine potential impacts of Brexit and a series of follow‐on bilateral FTAs. The scenarios assume a UK‐EU‐27 FTA is followed by EU‐27 bilateral FTAs with Australia and New Zealand and then UK bilateral FTAs with those two plus South Africa and Chile (with whom the EU already has FTAs). The new EU‐Japan FTA is also assessed. Brexit’s impact comes more from assumed changes to the UK’s income growth and the pound’s exchange rate than to its tariffs. The bilateral trade consequences of the trade‐diverting and trade‐creating effects of each additional FTA are highlighted. They are then compared with the effects of a multilateral agreement to remove all wine import tariffs globally. Unrealistic though this is, it exposes the far bigger benefits to wine producers and consumers that could emerge from a single multilateral undertaking than from several bilateral or regional FTAs.

Suggested Citation

  • Kym Anderson & Glyn Wittwer, 2018. "Cumulative effects of Brexit and other UK and EU‐27 bilateral free‐trade agreements on the world’s wine markets," The World Economy, Wiley Blackwell, vol. 41(11), pages 2883-2894, November.
  • Handle: RePEc:bla:worlde:v:41:y:2018:i:11:p:2883-2894
    DOI: 10.1111/twec.12726
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    Cited by:

    1. Matthew Smith & Yasaman Sarabi, 2021. "UK trading patterns within and between regions in the automotive sector—A network analysis," The World Economy, Wiley Blackwell, vol. 44(2), pages 510-529, February.
    2. Ridley, William & Luckstead, Jeff & Devadoss, Stephen, 2022. "Wine: The punching bag in trade retaliation," Food Policy, Elsevier, vol. 109(C).
    3. Masset, Philippe & Weisskopf, Jean-Philippe & Cardebat, Jean-Marie & Faye, Benoît & Le Fur, Eric, 2021. "Analyzing the risks of an illiquid and global asset: The case of fine wine," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 1-25.
    4. Glyn Wittwer & Kym Anderson, 2021. "COVID‐19’s impact on Australian wine markets and regions," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(4), pages 822-847, October.
    5. Ridley, William & Luckstead, Jeff & Devadoss, Stephen, 2022. "Wine: The punching bag in trade retaliation," Food Policy, Elsevier, vol. 109(C).

    More about this item

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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