Stephen Gallo: Brexit 'Unscrambles' European Trade Omelet

The video discusses the trade gravity model in Europe, highlighting how large, wealthy economies tend to trade more with each other, while smaller, poorer economies trade less, especially when distant. It explores the potential impact of Brexit on trade flows, suggesting that it could complicate trade and create political risks within the EU. The discussion emphasizes the importance of free trade for economic growth and the potential consequences if trade agreements like Schengen break down.

What is the main idea behind the trade gravity model in Europe?

• Large economies trade more with distant countries.

• Trade is unaffected by geographical distance.

• Rich, large economies trade more with nearby rich economies.

• Small economies trade more with each other.

How might Brexit affect trade flows within Europe?

• It will increase trade between the UK and EU.

• It could make trade more difficult.

• It will have no impact on trade.

• It will simplify trade agreements.

What does the phrase 'unscrambling the omelet' refer to in the context of Brexit?

• Simplifying trade processes.

• Improving economic growth.

• Reversing established trade relationships.

• Creating new trade agreements.

What are the potential political risks for the EU if the UK leaves?

• Increased unity among EU countries.

• Strengthened trade agreements.

• Political instability and economic challenges.

• No significant changes.

Why is free trade flow important for the growth of EU countries?

• It significantly contributes to economic growth.

• It ensures economic independence.

• It limits trade with non-EU countries.

• It reduces political risks.