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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: 


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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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