What trade deals has the UK done since Brexit?

LONDON (CU)_On Christmas Eve last year, the United Kingdom and the European Union agreed on a new trade agreement which would set out the rules for trade that would take place between the parties following the expiration of the Brexit transition period on December 31. Accordingly, London and Brussels agreed to prevent any tariffs and quotas, which would have made it more expensive for the parties to trade.

The agreement however, not only covers trade in goods and services, but also several other areas of interest, including investment, tax transparency, competition, state aid, air and road transport, etc. This is owing to the fact that since January 1, not everything is the same as it was before. The UK, for instance will need to get used to new checks at the Northern Ireland border since the country does not follow EU rules on product standards. This would mean businesses will face delays in deliveries owing to increased paperwork.

More importantly, the deal does not completely eliminate the possibility of tariffs in the future. The parties have agreed to share similar rules in areas such as environmental protection and workers’ rights, and if either party was to shift their rules too far, the other may introduce tariffs.

Meanwhile, the matter also arises regarding trade agreements to which the UK was party, prior to Brexit. Before January 1, the United Kingdom was automatically party to any trade deal negotiated by the EU with non-member states. There were about 40 such agreements covering more than 70 countries at the time the UK left the bloc. Accordingly, London has entered into deals with 63 of these countries in order to continue trade the same way following Brexit. However, deals with four countries, namely, Canada, Mexico, Jordan and Albania, will not fully come into force yet. 

Trade agreements that took effect from 1 January 2021

While the largest agreements have been done, discussions are ongoing with five other countries or blocs in order to secure trade agreements. On the other hand, regarding any existing agreement through the EU which has not been rolled over, starting January 1, United Kingdom’s trade with such countries will be carried out according terms set out by the World Trade Organisation until a deal could be reached. This however, would mean that importers will face tariffs and extra paperwork.

The first agreement signed by London that differed from an existing EU deal was the agreement with Japan, signed on October 22. This deal is considered to be significant as trade between the two countries (imports and exports) in 2019 amounted to £31.6bn. Another key deal secured by the United Kingdom was the government’s application to join a free trade area with 11 Asia and Pacific nations called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Sever key trade partners, including Canada, Australia, Japan and New Zealand are members of the group.