Brexit and Asian Exports: A Value Chains Perspective

The UK departure from EU (Brexit) has profound economic implications for all countries engaged in the global value chains. Using a new decomposition approach, this study examines the position of Asian exports in the EU27-UK supply chains trade. We find that total Asian VA embedded in the EU27-UK supply chains trade increased during 2000-2014, mostly due to the emergence of China. Although Japan's position in the EU27-UK supply chains trade declined, her positions in the supply chains trade between EU27 (the UK) and all EU27's (the UK's) trading partners have increased. Some Asian industries, including computer and electronic and electrical equipment or textile and garment apparel, may affect heavily due the EU27-UK trade disruptions.