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CentrePiece article
in brief...Multinationals and the customs union
Paola Conconi
July 2018
Paper No' CEPCP535:
Full Paper (pdf)

CentrePiece 23 (2) Summer 2018

JEL Classification: F23;F53

Tags: trade agreements; rules of origin; input-output linkages

Leaving the customs union may lead multinationals to move out of the UK, resulting in the loss of thousands of jobs. That is the conclusion of research by Paola Conconi. She explains that in a customs union, goods cross borders seamlessly, but in a free trade agreement, border checks are needed to ensure conformity with ‘rules of origin’. Rules of origin in free trade agreements distort global value chains, her analysis notes: they will be key to the future UK-EU relationship.

This article draws on ‘From Final Goods to Inputs: The Protectionist Effect of Rules of Origin’ by Paola Conconi, Manuel García- Santana, Laura Puccio and Roberto Venturini, CEP Discussion Paper No. 1525, December 2017.