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17 J. Int'l Trade L. & Pol'y 2 (2018)

handle is hein.journals/jitlp17 and id is 1 raw text is: The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com/1477-0024.htm JITLP 17,1/2 Received 31 December 2017 Revised 31 December 2017 Accepted 10 January 2018 Journal of International Trade Law and Policy Vol.17 No.1/2, 2018 pp. 2-18 ©Emerald PublishingLimited 1477-0024 DOI 10.1108ag1P-12.2017-0053 Multinationals' effects: a nearly unexplored aspect of Brexit Claudia Fernindez-Pacheco Theurer Universidad Autonoma de Madrid Facultad de Derecho, Madrid, Spain Jose Luis L6pez Ruiz Universidad Complutense de Madrid Facultad de Estudios Estadisticos, Madrid, Comunidad de Madrid, Spain, and Maria C. Latorre Universidad Complutense de Madrid, Madrid, Spain Abstract Purpose - The purpose of this paper is to review the economic studies on Brexit, highlighting that they have focused mainly on its negative impact on trade. The economic intuition behind these outcomes is provided, explaining why they are asymmetric with the UK being much more harmed than EU-27. Design/methodology/approach - The importance of foreign multinationals in the UK and of UK's multinationals abroad is shown using a non-standard quantification, which may be preferable than conventional methodologies. In addition, EU trade and investment legislative regimes are explained. Particular attention is paid to the change after the 2009 Lisbon Treaty which transfers foreign investment to the exclusive competence of the EU as opposed to EU states. Findings - The data show that EU-27 is a much less important investment than trade partner for UK. Originality/value - Although modelling the economy-wide impact of multinationals is challenging, the data and EU legislative framework analyzed suggest it is very much worthwhile. Other considerations about UK's diminished leveraging power to negotiate after its EU's withdrawal are also considered. Keywords Foreign direct investment, FDI, Economic impact, EU FDI legislative framework, EU trade legislative framework, Foreign trade Paper type General review 1. Introduction Several unexpected events in the past recent years seem to be challenging the process of globalization that has dominated the world economy for decades (Subramanian and Kessler, 2013). USA withdrawal from the Trans-Pacific Partnership (Ortiz and Latorre, 2016), the pause of the Transatlantic Trade and Investment Partnership negotiations (Latorre and Yonezawa, 2018) and other Trump's protectionist measures, together with Brexit are changing the landscape of international relationships. This paper analyzes a nearly unexplored aspect of the multifaceted process of Brexit. Much has been written about the impact of Brexit on foreign trade. In fact, most of the papers that analyze that historical decision deal with trade (Busch and Matthes, 2016; Latorre et al., 2018a; for reviews). The majority of them find that the reduction in trade resulting from Brexit will be harmful for UK. They also find that it will be harmful for the rest of the European Union (EU-27, henceforth), but UK will be much more negatively affected than EU-27.

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