Caspian Energy Journal Caspian European Club
Monday, 01 April 2019 13:00

No-deal Brexit could affect EBRD regions

No-deal Brexit could affect EBRD regions

Newly published EBRD research finds that a significant proportion of value chains within the 12 EU countries where the Bank operates, and also in Turkey as a member of the EU Customs Union, could be affected in an event of an exit of the United Kingdom from the European Union with no deal, Caspian Energy News ( reports with reference to the press statement of EBRD.

A no-deal Brexit could have extensive effects, not only on direct trade between Turkey, the EBRD countries in the EU and the United Kingdom, but also on indirect exports through value chain integration within the European Union.

EBRD economists’ analysis based on the ’Trade in Value Added’ (2018) OECD database shows that in the case of the UK leaving the EU under a no-deal scenario, 6.8 per cent of the EBRD countries’ domestic value-added exports  would be affected by potential disruptions to direct and indirect trade linkages with the UK. The share would be even higher for Cyprus, Turkey and Poland, for which the British market accounts for 7.9 - 9.1 per cent of total export volume.

Furthermore, the affected trade volume amounts, on average, to 0.9 per cent of total output of the EBRD countries in 2015, whereas the share is higher for countries such as Cyprus (1.9 per cent), Lithuania (1.3 per cent), Hungary (1.3 per cent) and Poland (1.2 per cent).

The 12 EBRD countries that are part of the EU, plus Turkey could also face modest value chain disruptions in certain economic sector exports in the event of a no-deal Brexit, as various trade barriers would evolve and disrupt supply links between industries in the UK and the EU.

In absolute terms, the EBRD countries have a higher exposure to trade disruptions in value chain linkages with the UK than vice versa. US$ 7.5 billion of British inputs, mostly business services, were used as inputs in the production process of manufacturing exports of the EBRD countries in 2015. The UK also relies on foreign inputs for exports, but sourced only US$ 4.8 billion of foreign inputs from EBRD countries in 2015, much of it for the UK’s transport industry.

More details:

Person in charge of the newsline: Olga Nagiyeva 


Read 691 times