Quantifying non-tariff barriers: Brexit, input sourcing and firm performance

Gustaf Dillner, Rebecca Freeman, Kalina Manova and Thomas Sampson

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: How successful is European integration in removing non-tariff trade barriers? We study how Brexit affected UK firms' input sourcing and sales. The post-Brexit Trade and Cooperation Agreement (TCA) reduced sales and input expenditure at firms with higher pre-Brexit EU trade exposure. It also caused firms to switch towards domestic and non-EU inputs. Through the lens of a trade model, the switch in input sourcing implies the TCA increased trade costs on EU imports by 21% and raised unit production costs by 3:1% for the average UK importer. Our results indicate EU membership secures large reductions in trade costs.

JEL-codes: L81 N0 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2026-09-30
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