Project Dissertation: BREXIT's Impact on UK Trade and Living Standards

This dissertation investigates the multifaceted consequences of BREXIT on the United Kingdom's trade and living standards. The research explores the historical context of the UK's relationship with the European Union, emphasizing the impact of the referendum on trade dynamics. The study employs a comprehensive methodology, including a literature review, outlining research philosophy, approach, design, and data collection methods. The analysis section delves into the major consequences of BREXIT, examining its effects on the free internal market, trade flows with key partners, and the impact on migration, foreign investment, and regulatory frameworks. The findings indicate significant shifts in trade costs, supply chain considerations, and the overall economic landscape. The study concludes with recommendations for navigating the post-BREXIT environment, offering insights into potential future trade agreements and their implications for UK living standards. The dissertation utilizes both primary and secondary data to provide a well-rounded assessment of BREXIT's effects on the UK economy.

Running head: PROJECT DISSERTATION
The consequences of BREXIT for UK trade and living standards: Project Dissertation
Name of the Student
Name of the University
Author’s Note

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Acknowledgement
Professional research on this topic is one of the most identifiable and enriching experience off
my life ever. I think after successful completion of this research my knowledge base and research
skill will automatically enhance a lot. During the research study, I have obtained sufficient
knowledge about the consequences of BREXIT considering the standard living trade of UK. In
order to gather information for conducting this research my supervisors helped me a lot. I would
like to thank my co workers and supervisor for supporting me throughout while collecting and
analyzing the key research findings. Not only this but also I would like to thank my friends
because they also helped me lot for gathering secondary data in terms of journals and articles.
Moreover I would also like to thank the other professionals who helped me a lot while
conducting survey in the retails industries. I have got inspiration and support as well from these
above mentioned people for helping e throughout the research study.
Thanks and regards
Yours Sincerely,

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Executive summary
The European Union is considered as the largest trade partner of the UK. Approximately a half
of the UK’s trade is with the European Union. The membership of EU minimizes costs in trade
between the UK as well as the EU. Hence, Leaving the EU would make lower trade between the
UK as well as EU as there is higher tariff as well as non-tariff barriers to trade. Moreover, the
UK would gain advantages less from future market integration within the organization. This
paper is focused on both the positive and negative impact of BREXIT over the trade and the
living standards of United Kingdom. It has been found that the referendum of United Kingdom is
able to shape the relation of the country along with one of the largest European Union (EU). In
order to conduct the research work a vast investigation has been done while choosing the most
suitable research methodologies in terms of research philosophy, approaches, data techniques,
data collection and ethical consideration also. The top destination of export and origin of imports
are measured with the help of statistical information. The standards of both United Kingdom and
European Union will help to shape the familiar guidelines principles to make sure that all the
legal order is accordingly followed. In order to conduct the research work, the plan changes in
United Kingdom are also illustrated. For this research work both the primary and secondary data
are gathered and all current secondary information are considered to demonstrate the research
resultants.

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Table of Contents
1. Chapter One: Introduction...........................................................................................................5
1.1 Introduction of the research topic..........................................................................................5
1.1 Background of the research...................................................................................................5
1.2 Research Aim.........................................................................................................................6
1.3 Research Objectives...............................................................................................................7
1.4 Research Questions................................................................................................................7
1.5 Rationale of the Study...........................................................................................................8
1.6 Structure of the Study............................................................................................................8
1.7 Summary................................................................................................................................9
2. Chapter Two: Literature Review...............................................................................................10
3. Chapter Three: Research Methodology.....................................................................................21
3.1 Introduction..........................................................................................................................21
3.2 Method Outline....................................................................................................................21
3.3 Research Onion....................................................................................................................21
3.4 Research Philosophy............................................................................................................22
3.4.1 Justification for Selection of chosen philosophy..........................................................24
3.5 Research Approach..............................................................................................................24
3.5.1 Justification for Selection of chosen approach.............................................................25
3.6 Research Design..................................................................................................................25
3.6.1 Justification for Selection of chosen design.................................................................27
3.7 Data Collection Process.......................................................................................................27
3.7.1 Data Sources: Primary and Secondary.........................................................................27
3.7.2 Data Techniques: Qualitative and Quantitative............................................................28
3.8 Ethical Considerations.........................................................................................................29

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3.9 Research Limitations...........................................................................................................30
3.10 Time Horizon.....................................................................................................................31
3.11 Summary............................................................................................................................32
4. Chapter Four: Analysis and Discussion.....................................................................................33
4.1 Introduction..........................................................................................................................33
4.2 Major Consequences of BREXIT in UK Trade and Living Standards: Findings and
Implications...............................................................................................................................34
4.2.1 Free Internal Market.....................................................................................................34
4.2.2 Affected countries such as Belgium, Netherlands, and Germany................................34
4.2.3 Future UK trade flow....................................................................................................38
4.3 Estimation of BREXIT Consequences in UK Trade and Living Standards: Findings and
Implications...............................................................................................................................39
4.3.1 Increment of Trade Cost...............................................................................................39
4.3.2 Influence on Transfer Pricing.......................................................................................41
4.3.3 Reconsideration of Locations for Supply Chain and Value Chain...............................42
4.3.4 Future UK Trade Flow..................................................................................................43
4.4 Effect of BREXIT on Migration, Foreign Investment and Regulation...............................44
4.4.1 Financial analysis..........................................................................................................47
4.4.2 EU Membership impact on FDI...................................................................................49
4.4.3 Changes in FDI for impacting on UK incomes............................................................50
4.5 Analysis Summary...............................................................................................................51
5. Chapter Five...............................................................................................................................53
5.1 Conclusion...........................................................................................................................53
5.2 Recommendations................................................................................................................57
References......................................................................................................................................59

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1. Chapter One: Introduction
1.1 Introduction of the research topic
The study aims to state the impacts of BREXIT over Trade and living standards in UK.
Outcome obtained from EU (European Union) membership in UK’s referendum has potential for
shaping up country’s relationship along with largest trading partners in EU membership.
Membership of EU is likely to reduce the cost for trading between UK and rest of Europe
(Dhingra et al. 2016). In obvious way, between EU members, the ‘customs union’ exists and this
means that multiple tariff barriers are removed within EU. The removal of tariff barriers allows
free trading of goods and services (Wadsworth et al. 2016). However, in equally important way,
the reduction of trading cost is identified as lessening non-tariff value barriers that resulted into
EU’s continue efforts for creating independent and single market in Europe.
1.1 Background of the research
As per UK background, the non-tariff barriers incorporate wider range of measures for
increasing cost for trading such as threats of anti-dumping, checking rule of origin, border
controlling, and the differences among the cross countries over various regulations for the
standard of products and their safety as well. The trade barriers reductions can increase the
trading value between EU and UK with these aspects. Before, in 1973, UK is a part of the
European Economic Community, value-basis one-third of UK trading was connected with EEC
(Kierzenkowski et al. 2016). In 2014, other 27 EU trading members include 45% exporting from
UK and 53% exporting from UK is considered under other countries’ imports. Exports from EU
includes 13% of national income and higher trading values can provide benefits to UK customers
throughout lower price ranges with accessing better goods and services. To some extent, the UK

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workers and business entrepreneurs benefit upon from new export opportunities for leading to
high value sales and profits in businesses.
The export opportunities allow UK for specializing over industries so that it can acquire
competitive advantage. Along with the sales and service channels, the trade raising outputs
increases income and improves living standards of UK (Dhingra et al. 2016). The standards
provide effects over trading and this is understood over several other countries. In recent
decades, the trade studies revealed that there are bigger effects of BREXIT in UK living
standards and trading value.
1.2 Research Aim
This particular study has broad aim for stating impacts of BREXIT over Trade and living
standards in UK. To achieve proper implications and outcomes, the consequences of BREXIT
will be estimated considering two scenarios such as optimistic and pessimistic over the trade.
This scenario consideration is completely based on secondary findings and study related
outcomes. Furthermore, the dissertation aims to provide secondary study analysis and findings
about future trade agreements that are related with UK living standards. This findings should be
able to provide alternative trading procedures that is related to UK trade and living standard. The
major impacts on migration, foreign investments, and regulation will be discussed in this study to
depict BREXIT impacts over global economy.
Based on the background, the primary implication is stated as higher productivity and
innovation can have major impact on other routes. The broad question is stated to be: how
BREXIT can cast its impact on trading in UK and to find out what impacts BREXIT have on UK
incomes? This dissertation is based on secondary study and several studies reveal that BREXIT

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has impact on UK living standards and this study aims to estimate the degree of influence that
BREXIT cast upon UK living standards.
1.3 Research Objectives
Depending on the stated aim of research topic, the research determines specific objectives
and relevant research questions in later sections. Primary research objectives are included as
following:
1. To identify the major impacts of BREXIT over Trade and living standards in UK
over global economy aspect
2. To identify appropriate ways for determining the impact scoring for BREXIT
across trade and living standards in UK
3. To identify effects of BREXIT on tax regulations, foreign investments and
migration
Identified objectives from the study can provide detailed outline over the dissertation.
The objectives can formulate specific research questions so that study can achieve a proper
format over the study.
1.4 Research Questions
The set of designed research questions for this specific research topic are as follows:
a) What are the major impacts of BREXIT over Trade and living standards in UK
over global economy aspect?
b) How could the appropriate ways be determined the impact scoring for BREXIT
across trade and living standards in UK?

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c) How BREXIT cast effect on migration, foreign investment and regulation?
1.5 Rationale of the Study
Rationale of the study states the study motivation in which the research will be completed
in order to reach mentioned research objectives. The researchers have presented range of
secondary study forecasting some estimation methods can be used as alternative along with
different assumptions on relationship between UK and EU. The researchers follow narrow and
static trading consequences of BREXIT besides considering particular ways through which
BREXIT can put influence on UK economy along with considering migration and investment
(Crafts 2016). As it is quite critical to assess the economic future of UK and BREXIT
consequences as economic future of UK may bring several uncertainties in business. The
researchers have studied BREXIT consequences with reducing trade along with lowering UK
living standards. More prominently, for per capita the frequently falling income can result to
much low trade even more than the offsets over different potential saving on UK. The saving can
obtain reduction in fiscal contributions for EU budget so that baseline estimate can imply
accounting over fiscal savings (Ebell and Warren 2016). Effect of BREXIT can be equivalent to
fall in UK income between 1.3% to 2.6% with declining over average annual household income
between £850 and £1,700 per year.
1.6 Structure of the Study
The research structure will be segmented under five chapters as Introduction, Literature
Review, Research Methodology, Analysis, and Conclusion. The introduction chapter will
determine aims, formulated objectives and questions, and state the research rationale. The
introduction section is relevant for demonstrating background of the topic and detailed findings

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about agenda. Rationale of the study provides appropriate way to realize how the study should be
completed within stipulated timeline.
The literature review section will present several secondary study outcomes regarding the
topic to show findings related with BREXIT consequences in UK Trade and living standards.
The research methodology chapter will present the overall methodology comprising of approach,
design, format, and techniques. Research methodology section is essential for segmenting the
activities under timeline basis so that entire research can be completed within time. Furthermore,
the analysis chapter will provide analytical outcomes and implications. Analysis of collected data
will provide suitable description. The analysis will be secondary as the study is based on cross-
sectional aspect of agenda. The conclusion section will align the findings with objectives to
demonstrate them and will present the future scope of the study. The final chapter deals with
findings to show how the study reached the aims with meeting the research questions providing
implications as well.
1.7 Summary
Based on the introduction chapter, it can be concluded that primarily, the study aims to
identify influences of BREXIT over UK Trade and living standards. As per findings in
background section, the reductions in trade barriers can increase the trading value between UK
and EU with these aspects. In recent decades, the trade studies revealed that there are bigger
effects of BREXIT in UK living standards and trading value. However, as per structure of the
study, this dissertation is based on secondary study. The researchers have studied BREXIT
consequences with reducing trade along with lowering UK living standards.

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2. Chapter Two: Literature Review
For performing estimation of BREXIT effects over UK trade and living standards, the
researchers have used modern way of quantitative trade model over global economy.
Quantitative trade model is relevant for accommodating the channels throughout trade effects so
that this trade can influence customers, firms and workers (Dhingra et al. 2017). The trade model
provides mapping over trade information to UK welfare providing numbers in which real
incomes can be changed to various policies of trades. Some easily available information is
considered for trade volunteers and for removing potential trade barriers (Ottaviano et al. 2014).
The trade model utilizes most recent data collected from WIOD for dividing world economy
under 35 major sectors along with 31 regions. The sector wise segmentation allows transitional
inputs and ultimate outputs both from the good and service. Moreover, this model considers the
effect of BREXIT over the trade of UK with EU relationship and trade of UK corresponding rest
of the world data (Dhingra and Sampson 2016). For forecasting the consequences of BREXIT in
UK aside from EU relationship, the researcher should consider some assumptions so that the
trade change can be shown with BREXIT impacts.
The meaning of Brexit for USA
It is referred as the decision of the UK and known as the abbreviation of British Exit. The
vote results the defined expectations as well as roiled global markets that causes British pound
falling it to the level against the dollar in 30 years. The prime minister called the referendum as
well as campaigned for Britain in order to remain in the EU.
History of the UK economy

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The economic history of the UK deals with the economic history of the country. The
nation is becoming one of the most prosperous economic regions in Europe. It led the industrial
evolution as well as dominated the world economy during 19th century. It was one of the major
innovators in machinery like system engines. On the other hand, the economic output per head of
the population has rose by 500%. It generates an important rise in the living standards. On the
other hand, it produces relative economic decline as other countries like the USA caught up.
The labor government of the UK has enacted a political program rooted in collectivism
that includes nationalism of the industries as well as state direction of the economy. On the other
hand, the concept of nationalization of the coalmines is accepted by principles. The major
economic priority of the post-was required to raise exports. The required extension of rationing
and balancing the dollar deficit are required to requisitioned for the export markets.
PESTEL analysis of UK
Political factors: The UK is a constitutional monarchy, which runs under the process of
influencing parliamentary system. The UK industry is a fair and stable country with several
opportunities in order to get the operating within as well as country as a whole. The government
of the country is proactive and politically stable. It splits into national as well as local
administrations. However, there is a strong economic position.
Economic factors: The economic position is related to different countries. It has a high
GDP, diverse economy. However, the issues are helpful to look after the economic factors. The
large population allows large public as well as private sectors. It increases foreign direct
investment.