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This study provides a quantitative analysis of the potential medium-run impacts of two Brexit scenarios on the Danish food and agricultural sectors. In the WTO scenario, the UK and EU are assumed to treat each other on WTO MFN terms, implying rising bilateral tariffs to the MFN levels of the EU and also rising non-tariff barriers; whereas in the FTA scenario, a normal free trade area between the two sides are assumed, implying zero tariff but still rising NTBs. The UK is further assumed to exit preferential trade agreements negotiated by the EU with third countries in both scenarios, implying rising trade costs between the UK and these third countries.

The expected medium-run impacts of the two scenarios are evaluated in a common baseline in a computable general equilibrium model. The baseline is constructed by projecting the world economy to 2021, a year when the Brexit scenarios are assumed to be in effect. In the baseline, current macroeconomic projections towards 2021 are targeted while current trade policies including the membership of the UK in the EU common market are maintained. Additionally, a few important