Jun Du

Professor of Economics Aston University

Birmingham

Professor Du's main research interest is to understand the driving forces and impediments of productivity enhancement and economic growth.

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Spotlight

Sep 17, 2024

3 min

EU-UK Trade Deal continues to stifle trade with 27% drop in exports since 2021

New report shows persistent stifling effects of the impact of the Trade and Cooperation Agreement on UK-EU trade relations Monthly data show a 27% drop in UK exports and a 32% reduction in imports to and from the EU between 2021 and 2023 Recommendations for policy interventions include to negotiate sector-specific deals, engage with individual EU countries, and work on reducing non-tariff barriers A comprehensive analysis by researchers at the Centre for Business Prosperity at Aston University reveals that negative impacts of the UK-EU Trade and Cooperation Agreement (TCA) have intensified over time. The new report, Unbound: UK Trade Post Brexit, also shows a 33% reduction in the variety of goods exported, with the agricultural, textiles, clothing and materials sectors most affected. To assess the impact of the UK-EU TCA, the authors analysed monthly import and export between the UK and the EU, from January 2017 to December 2023 and separated into preand post-January 2021 when the agreement came into force. The monthly data shows a 27% drop in UK exports and a 32% decline in imports from the EU. Lead author, Professor Jun Du of Aston University says: “The Trade and Cooperation Agreement introduced substantial barriers and there are ongoing and marked declines in the value and variety of UK exports and imports. Without urgent policy interventions, the UK’s economic position and place in the global market will continue to weaken.” The UK-EU TCA redefined trade and investment rules and market access between the UK and the EU. Since it came into force, the UK government has negotiated several trade agreements, but the EU remains the UK’s largest trade partner. Exports for most sectors have decreased since January 2021, although the impact is varied. Agrifood, textile and clothing and material-based manufacturing have been among the hardest hit, with substantial declines in both export value and the variety of products exported. At the same time, some sectors such as tobacco, railway and aircraft manufacturing have seen modest increases in varieties of products exported. On the import side, most sectors have shrunk in both value and variety, particularly agrifood products, optical, textile and material-based manufacturing. A few sectors, for example, ships and furniture, have demonstrated noticeable increases in import product variety. The large variations across different goods categories and EU trade partners underscore the uneven effects of Brexit and the TCA on UK-EU trade dynamics, highlighting the need to understand the nuances and come up with tailored strategies that address the unique challenges of each sector within the new regulatory environment. The researchers make recommendations, outlining how sector-specific negotiations, streamlining customs procedures with digital technologies and reducing regulatory divergence could mitigate some of the impacts. Dr Oleksandr Shepotylo, the report’s co-author says: “Our findings indicate a decoupling of the UK from key EU final goods markets, accompanied by a shift in UK supply chains toward geographically closer EU trading partners for exports and smaller countries for imports. “This shift raises concerns and underscores the urgent need for a strategic reconfiguration of UK supply chains to maintain competitiveness.” Professor Du continues: “The TCA has introduced considerable barriers to UK-EU trade, particularly through increased Non-tariff measures (NTMs). “Addressing these issues through targeted improvements to the TCA is crucial to ensuring that UK businesses remain competitive in the European market. A structured, multi-faceted approach is necessary.” To find out more about these findings, click here.

Apr 26, 2024

4 min

Veterinary deal would increase UK agrifood exports to EU by more than a fifth, research shows

A veterinary deal would increase agri-food exports from the UK to the EU by at least 22.5%, say researchers Agri-food exports overall are worth £25 billion to the UK economy, but the two years since the new trading rules were put in place have seen a fall of 5% in exports to the EU from 2019 levels, during a period where the sector has otherwise grown. Team from Aston University and University of Bristol have analysed trade deals and export figures worldwide to estimate impact of a new veterinary deal on UK–EU exports A veterinary deal with the European Union could increase UK agricultural and food exports by over a fifth, according to new research. The team, from Aston University’s Centre for Business Prosperity and the University of Bristol, analysed the agricultural and veterinary aspects of trade deals around the world to estimate their impact on exports. They then modelled the potential impact of different types of agreement on UK exports to the EU. Veterinary Agreements specifically focus on regulations and standards related to animal health and welfare, as well as to the safety of animal-derived products such as meat, dairy, and seafood. They aim to align, harmonise, or recognise veterinary requirements and certifications, and reduce the number of inspections between countries to facilitate the safe and efficient trade of live animals and animal products. The EU–UK Trade and Cooperation Agreement (TCA), implemented in January 2021, eliminates tariffs and quotas but does not remove non-tariff barriers to trade. These can be particularly burdensome for agricultural and animal-derived food (agri-food) exports, involving complex rules and requirements, production of extensive documentation and veterinary checks. The UK agri-food sector is a cornerstone of the UK economy, with exports worth £25 billion and employing 4.2million people. Although the sector is growing overall, exports to the EU shrank in 2022 by 5% compared to 2019, in part due to the new trade arrangements. This has led to calls for an EU–UK veterinary agreement from business and agri-food organisations, including the Confederation of British Industry, British Chambers of Commerce, UK Food and Drink Federation, Chartered Institute of Environmental Health and British Veterinary Association. Analysing data from the World Bank on 279 trade agreements and export statistics from over 200 countries, the researchers found that shallow agreements, that went little further than provisions already covered by World Trade Organisation (WTO) rules, had significant negative impacts on agri-food exports. However, where trade agreements went beyond WTO provisions to include more commitments on sanitary and phytosanitary (SPS) measures (which aim to protect countries against risks relating to pests, diseases and food safety) and were legally enforceable, they had a robust, positive impact on exports, particularly exports of animal products and food. Applying this to the UK–EU relationship, the team estimate that a veterinary agreement that went beyond the existing TCA provisions would increase agri-food exports from the UK to the EU by at least 22.5%. Imports from the EU would also increase by 5.6%. In the 203 countries studied for the research, positive effects of deep trade deals that included provisions on agriculture took between 10 and 15 years to manifest. But the UK might not have to wait so long, according to report co-author Professor Jun Du, Director of Aston University’s Centre for Business Prosperity. “There is no blueprint out there that mirrors the UK–EU relationship. Most veterinary agreements are agreed as part of a trade deal between countries that haven’t previously had close alignment and it takes a while for the benefits to take effect. “Until recently, the UK had frictionless agri-food exports to the EU, so it’s possible that a supplementary veterinary agreement to reduce some of the frictions created by Brexit could allow trade that previously existed to pick up again quite quickly.” However clear the economic arguments, the legal and political barriers to a veterinary agreement still remain. The researchers address these in their report, suggesting that the best format for the additional measures would be as a supplementary agreement to the TCA. The key question for the UK government in negotiating such an agreement would be what the EU demanded in return. “The closest model is the EU-Swiss relationship, which sees Switzerland largely follow EU law,” said report co-author from the University of Bristol, Dr Greg Messenger. “That’s unlikely to be an option for the UK. As we wouldn’t expect to eliminate all paperwork, we could both agree that our rules meet each other’s standard for phytosanitary protection. As most of our rules are still essentially the same as the EU, that wouldn’t require any major change, though we’d have to agree a greater level of coordination in relation to the development of new rules.” The report was written jointly by Professor Du, Dr Messenger and Dr Oleksandr Shepotylo, senior lecturer in economics, finance and entrepreneurship at the Centre for Business Prosperity, Aston Business School.

Apr 10, 2024

2 min

East or West – who holds the key to our collective future? Public lecture

Professor Jun Du is an applied economist with a keen interest in economic thinking, policy and business strategy Her lecture will examine the differences between Eastern and Western economic models It will take place at Aston Business School on Wednesday 24 April 2024. An influential professor of economics and expert in global trade will be giving an inaugural public lecture at Aston Business School on Wednesday 24 April 2024. Professor Jun Du is an applied economist with a keen interest in economic thinking, policy and business strategy. Her research looks into the drivers and obstacles to boosting productivity and economic growth from the perspectives of individuals, firms, industries, regions and nations. Her lecture, East, West, which is best? State, Market and the Return of Industrial Policy, promises to be an engaging narrative journey through the contrasting economic development experiences of Eastern and Western countries. Leveraging her extensive research and personal insights, Professor Du will delve into the complex dynamics between state, policies and the twin engines of growth – entrepreneurship and innovation. Professor Du said: “With the backdrop of global challenges, technological upheavals and pressing environmental crises, we find ourselves pondering on the critical question ‘East, West: who holds the key to our collective future?’ “In my lecture I will not just be looking at the differences, but also the strengths and lessons each brings to the table in our quest for sustainable progress and shared prosperity. We will delve into the landscape of economic governance with the formidable powers of the state, the market and entrepreneurs in conflict and convergence, collectively shaping the industries of the future. “This lecture seeks to spark a conversation that encourages innovative approaches to economic governance, with the goal of ensuring lasting prosperity for generations to come. “This is an invitation to change the world. I hope to see you there.” This lecture is free of charge and open to all to attend either in person or online. Places must be booked in advance. You can sign up for this hybrid public lecture here.

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Biography

Jun Du is Professor of Economics at Aston Business School. Jun is an applied economist whose main research interest is to understand the driving forces and impediments of productivity enhancement and economic growth, from multi-level dimensions of individuals, firms, industries, regions, governments, and their interplays, in both developed and emerging economic contexts (China in particular). She has expertise in applied econometric methodologies using micro-data from both developed and developing countries. Jun held a visiting research fellowship in Stockholm School of Economics and is linked with Chinese Social Science Academy. She is also a research fellow in Advanced Institute of Management, and member of several professional bodies. Jun published in International Journal of Industrial Organization, Research Policy, Journal of Productivity Analysis, Entrepreneurship Theory and Practice, Journal of Law, Economics and Journal of Business Venturing and International Journal of Business Studies. Her research has received external funding from the Economic and Social Research Council (ESRC), Leverhulme Foundation, NESTA foundation, and various UK government agencies including UKTI, DTI and BIS, local governments (Manchester, Birmingham and West Midlands local authorities), as well as from the private sector. She led the productivity research projects in the Business Demography Research theme in the UK Enterprise Research Centre (ERC), and currently the Director of the Lloyds Banking Group Centre for Business Prosperity (LBGBP) leading on projects on the UK firm international trade, innovation and productivity.

Areas of Expertise

Economics

Trade

Education

University of Leicester

PhD

Economics

2006

Cardiff Business School

MSc

International Economics, Banking & Finance Cardiff

2002

Inner Mongolia University

Economic Management

1999

Media Appearances

Are individualistic societies worse at responding to pandemics?

The Conversation online

2020-10-13

UK Prime Minister Boris Johnson recently suggested that coronavirus infections are higher in the UK than Germany or Italy because Britons love freedom more, and find it harder to adhere to control measures.

Implementation a “big problem” for any Brexit deal, UK inquiry told

Global Trade Review online

2020-06-11

Jun Du, professor of economics at Aston Business School, says UK firms “seem to be defying conventional theories of trade gravity”, whereby most companies trade with markets that are geographically close.

Brexit: UK's smallest firms divert £10bn in exports away from EU

The Guardian online

2020-06-01

Jun Du, professor of economics at Aston Business School, said: “This evidence suggests that UK exporters are jumping before they’re pushed – finding alternative markets worldwide for their products even before we know the outcome of the current UK-EU trade negotiations and any potential new barriers.

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Articles

Local governance and business performance in Vietnam: the transaction costs’ perspective

Regional Studies

Bach Nguyen, Tomasz Mickiewicz, Jun Du

2017-07-27

Local governance and business performance in Vietnam: the transaction costs’ perspective. Regional Studies. This paper adopts a transaction costs’ perspective to explain why the growth of small and medium-sized enterprises (SMEs) may vary across regions of an emerging economy. Furthermore, it is argued that young and small firms gain more from the improvement of local governance than do old and large firms. In addition, depending on the institutional history, SMEs will respond differently to the incentives provided by local governance. Analysing more than 300,000 SMEs in Vietnam during 2006–12, it is shown that higher-quality local governance positively influences local SME revenue growth; this effect is stronger for young and small firms, and matters more where institutional history suggests there is less support for entrepreneurship.

Global reversal, regional revival?

Regional Studies

Ivan Turok, David Bailey, Jennifer Clark, Jun Du, Ugo Fratesi, Michael Fritsch, John Harrison, Tom Kemeny, Dieter Kogler, Arnoud Lagendijk, Tomasz Mickiewicz, Ernest Miguelez, Stefano Usai, Fiona Wishlade

2017-01-19

Regional Studies celebrates its 50th anniversary with this special issue. This introductory article reflects back on developments since the journal was started and offers signposts for urban and regional research looking ahead. It outlines the changing global context for regional studies and identifies some of the ways in which the need for regional research is enhanced by the extraordinary challenges currently confronting the world. It also introduces important themes from the recent history of the journal that are likely to feature in future. This is obviously a highly selective exercise, given the considerable breadth and depth of regional research over the years.

Explaining intermittent exporting: Exit and conditional re-entry in export markets

Journal of International Business Studies

Michele Bernini, Jun Du & James H. Love

2016-08-22

Intermittent exporting is something of a puzzle. In theory, exporting represents a major commitment, and is often the starting point for further internationalization. However, intermittent exporters exit and subsequently re-enter exporting, sometimes frequently. We develop a conceptual model to explain how firm characteristics and market conditions interact to affect the decision to exit and re-enter exporting, and model this process using an extensive dataset of French manufacturing firms from 1997 to 2007. As anticipated, smaller and less productive firms are more likely to exit exporting, and react more strongly to changes in both domestic and foreign markets than larger firms. Exit and re-entry are closely linked. Firms with a low exit probability also have a high likelihood of re-entry, and vice versa. However, the way in which firms react to market conditions at the time of exit matters greatly in determining the likelihood of re-entry: thus re-entry depends crucially on the strategic rationale for exit. Our analysis helps explain the opportunistic and intermittent exporting of (mainly) small firms, the demand conditions under which intermittent exporting is most likely to occur, and the firm attributes most likely to give rise to such behavior.