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International Trade and UK De-Industrialisation

Published online by Cambridge University Press:  01 January 2020

Francesca Foliano  and
Rebecca Riley
Francesca Foliano*
Affiliation:
National Institute of Economic and Social Research
Rebecca Riley*
Affiliation:
National Institute of Economic and Social Research, Economic Statistics Centre of Excellence, and Centre for Macroeconomics
*
E-mail: [email protected]
E-mail: [email protected]
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Abstract

The past 25 years have been characterised by a surge in international trade as economies have become increasingly inter-linked. In many advanced economies this surge has been associated with increased import competition from low-wage economies. This paper explores the effects of such competition on manufacturing jobs in the UK. We consider two developments that influenced the nature of international trade: the ascendency of China as an important player in global markets and the accession to the European Union of a number of Eastern European economies in 2004. Both of these changes were associated with a shift in trade regimes and led to a sharp rise in import competition in particular UK manufacturing sectors. We find that these changes are likely to have hastened the decline of UK manufacturing.

Keywords

import competitionglobalisationde-industrialisationmanufacturingjobslocal labour marketsF14F16F66L60R11J23
Type
Research Articles
Information
National Institute Economic Review , Volume 242 , November 2017 , pp. R3 - R13
Copyright
Copyright © 2017 National Institute of Economic and Social Research

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Footnotes

This project was funded by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily those of the Foundation. We are also grateful to Michael Gasiorek for advice on the trade data and to Amit Kara, Garry Young and participants at a NIESR roundtable on the impacts of Brexit, September 2017, for their comments. Disclaimer: This work contains statistical data which is Crown Copyright; it has been made available by the Office for National Statistics (ONS) through the Secure Data Service (SDS) and has been used by permission. Neither the ONS nor SDS bear any responsibility for the analysis or interpretation of the data reported here. This work uses research datasets which may not exactly reproduce National Statistics aggregates.

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