In this first edition of Current Accounts, the Hinrich Foundation's newly launched trade podcast, our Research Fellow Stewart Paterson speaks with Jan David Bakker, of Bocconi University, on the rise of non-tariff barriers to trade, their impact on economic welfare, and the nature of data analysis on traded goods from horses to salt.

As the United Kingdom takes the first tentative steps into Brexit, after voting to leave the European Union in mid-2016, it triggered a prolonged negotiation between the two parties that led eventually to the Trade and Cooperation Agreement (TCA) between the two sides coming into effect in January 2021. TCA allows tariff-free and quota-free trade between the two parties, however, since the UK is no longer in the European single market, and no longer in the Customs Union, some previously non-existent non-tariff barriers to trade have come into operation. This has given rise to an opportunity for trade economists to examine the impact of trade legislation and particularly non-tariff barriers on economic welfare.

The recently published paper by the Centre for Economic Performance titled- "Non-tariff barriers, and consumer prices: the evidence from Brexit" co-authored by Nikhil Datta, Richard Davies, Josh De Lyon, and Jan David Bakker, takes a data-driven approach to unpacking the impact of non-tariff barriers on consumer prices. Jan David Bakker, co-author of the paper and Assistant Professor of Economics at Bocconi University in Milan talks to Stewart Paterson, Senior Research Fellow at the Hinrich Foundation about the findings of the paper and the impact of Brexit on British consumers.

Among other issues including how geopolitics and globalization have driven food prices, and how specific classes of products drive non-tariff barriers, the discussion also focuses on the nature of trade data analysis.

In the discussion, Bakker and Paterson talk about the granularity of UK data versus the readily available international trade data provided by the United Nations Comtrade system, commonly used by economists. The challenge in aligning the datasets drill down to singling out commodities from salt to domesticated horses, and how that has a bearing on economic observations.

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