Why a no-deal Brexit is very bad idea for the United Kingdom: A shift to regional value chains

The organisation of production is currently changing from global value chains to regional value chains, due to the rise in production costs in emerging countries and the growing demand for local content. Production will therefore increasingly be established on a regional basis, close to the end-buyers of the products. The best economic strategy for a country to attract investments is therefore to become integrated in a vigorous regional market. If the United Kingdom's strategy is to leave the European Union and seek to grow by becoming integrated in global value chains with Asian and North American countries, this will therefore inevitably be a losing strategy.