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CEP discussion paper

Brands in motion: how frictions shape multinational production


Following the 2016 Leave vote in the referendum on UK membership in the EU and the election of Donald Trump, trade agreements have entered a period of great instability. To predict the impact of possible disruptions to existing arrangements requires counterfactual analysis that takes into account the complex set of factors influencing the production and marketing strategies of multinational corporations. We estimate a model of multinational decision making in the car industry. This model predicts the production reallocation and consumer surplus consequences of changes in tariffs and non-tariff barriers induced by NAFTA termination, Brexit, Trans-Pacific and Trans-Atlantic integration agreements.


Keith Head and Thierry Mayer

19 June 2018     Paper Number CEPDP1551

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This CEP discussion paper is published under the centre's Trade programme.