At 11pm today (31 January) – midnight across the Channel in Brussels – it will be five years since the UK formally withdrew from the European Union.
In that time the UK has signed several new trade agreements, including with Australia and New Zealand, as well as joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – an 12-country-strong bloc which removes additional barriers between a number of existing trading partners.
Agreements to ensure continued trade with EU neighbours and a suitable arrangement between the UK, Northern Ireland and the Republic of Ireland have also been brought into effect – ensuring no ‘hard borders’ arose that could affect the provisions of the Good Friday Agreement.
While government has worked to refine and implement the new legal frameworks, and businesses have made investments in compliance, the current Labour government is pursuing an altered approach and a ‘reset’ on UK-EU relations.
Trade and Cooperation Agreement
Coming into force on 1 January 2021, the EU-UK Trade and Cooperation Agreement (TCA) ensured that tariff-free trade between the parties remained possible. It also covers cooperation on areas beyond trade, such as law enforcement and social security.
The agreement averted a ‘No-Deal Brexit’, in which the UK would have needed to trade on basic, Most Favoured Nation terms with the bloc – and a host of other countries.
CPTPP
Conservative governments that oversaw the UK’s EU withdrawal touted the new opportunities it held to strike new trade deals around the world.
Five years on, the most wide-ranging such deal is CPTPP, which the UK formally acceded to in December.
The deal encompasses 11 other nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
All but Canada and Mexico have ratified the agreement, allowing the UK to reap trade benefits with the other nine members.
Of those nine, the UK will have new preferential arrangements with just Malaysia and Brunei, given that bilateral agreements were already in place for the other seven.
Nonetheless, experts have advised businesses to familiarise themselves with the terms of both bilateral deals and CPTPP trading terms in order to maximise benefits of both.
The economic benefits of the agreement to the UK economy are reportedly small, although the government has revised up its estimate from 0.08% UK GDP over the next decade to an added £2bn (approximately 0.06% GDP) per year.
Windsor Framework
One of the thornier practical issues of Brexit was how to ensure it worked in a way that satisfied political parties in both the Republic of Ireland and Northern Ireland, while avoiding a hard border on the Island of Ireland.
This was achieved through the Northern Ireland Protocol, which was later supplanted by the Windsor Framework Agreement, which came into effect from October 2023.
The agreements ensure Northern Ireland stays within the EU’s single market, meaning that goods could flow unimpeded across the border with Ireland.
However, this meant the need for checks and control on goods potentially bound for the EU was shifted to goods moving between Great Britain and Northern Ireland.
This included the introduction of a ‘green lane’, with goods shown to be NI-bound subject to less scrutiny, and a ‘red lane’ for those heading to Ireland and the wider EU, which includes full customs checks for certain products.
A number of new rules, such as labelling requirements for ‘green lane’ goods, and new rules around movement of parcels and freight, have since been delayed or postponed indefinitely.
Border Target Operating Model
The government’s initiative to make the UK border more data-driven and bring security standards on EU imports in line with measures imposed on UK exports, the Border Target Operating Model (BTOM), is being rolled out in phases.
The third phase begins today, with safety and security (S&S) declarations being required on EU imports to the UK. The measure has already been in place for importers bringing goods into the UK from Rest of World (RoW) countries but today marks the removal of the waiver that exempted goods from the EU.
The BTOM rollout began last year with changes to the import of Sanitary and Phytosanitary (SPS) goods – animal and plant products. High-, medium- and low-risk categories were introduced for SPS goods with corresponding new documentary measures and checks for those designated as high risk.
Documentary requirements were introduced one year ago, with border checks following on 30 April.
There were numerous reports of border delays, with companies complaining that shipments were spoiled or mishandled by border staff, leading to lost stock and revenue.
Logistical issues were also highlighted, with the Dover Port Authority challenging central government on its designation of Ashford’s Sevington facility as the Border Control Post for goods entering the UK via Dover, given its position 22 miles away from the border site.
Reset
The new Labour government has been seeking to “reset” UK-EU relations.
After warmly welcoming senior EU politicians and diplomats to Blenheim Palace last summer, the plan hit an obstacle with the UK’s refusal to consider a mobility scheme with the bloc for those aged 18-30.
Prime minister Sir Keir Starmer has continued to call for closer relations, notably a new veterinary agreement, which would remove some of the new checks required under BTOM and comparable EU measures.
While standing firm on the UK not rejoining the EU’s customs union or single market, several senior ministers, including chancellor Rachel Reeves and business and trade secretary Jonathan Reynolds, have made diplomatic noises in response to EU trade commissioner Maroš Šefčovič’s Davos offer for the UK to join the Pan-Euro-Mediterranean (PEM) Convention.
PEM would allow UK businesses tariff-free access to key materials and ingredients from Europe and North Africa.
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