As the UK launches trade talks with Greenland to reduce or remove tariffs of up to 20% on seafood, for today’s Daily Update bulletin
we review the state of play with other post-Transition free trade deals – in the early stages or signed, sealed and delivered.
European Union
State of play: The EU remains the UK’s single biggest trading partner (accounting for 42% of all UK exports in 2020), so landing this deal to coincide with Great Britain’s departure from the EU customs union and single market at the end of 2020 was a pivotal post-Brexit step.
The first anniversary of the EU-UK Trade and Cooperation Agreement has just been marked, a pact billed by the government as the “world’s biggest zero-tariff, zero-quota free trade deal”.
The agreement is designed to allow GB to trade freely with Europe – though traders must understand the deal’s detailed rules of origin to avoid or reduce tariffs – while also being able to seize
new trading opportunities with countries around the world (see below).
CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership)
State of play: In a post-Brexit world, membership of the CPTPP would be a huge endorsement of GB’s decision to leave the EU’s trading bloc.
The UK put in its application for membership of the Asia-Pacific trade federation at the beginning of 2021 and sees an Asian-tilt towards the fast growth economies of the region as an antidote to Brexit woes.
An accession working group will hammer out the details of the UK’s entry, including how it will take on the CPTPP’s terms and what will constitute its market access commitments.
India
State of play: Despite India’s resolutely protectionist stance on trade, its £2 trillion economy remains firmly on the UK government’s agenda, including cutting tariffs on exports of British-made cars and Scotch whisky.
In May 2021 prime ministers Boris Johnson and Narendra Modi of India agreed deeper trade co-operation through an ‘Enhanced Trade Partnership’ that removes a number of trade barriers and sets out the intention to work towards a free trade agreement.
Talks started this month (January) with the hope of doubling UK exports to India by £28bn a year by
2035.
Australia
State of play: Notable for being the first FTA the UK has negotiated from scratch – ie not an EU roll-over – the UK reached an agreement in principle with Australia in June 2021 and signed a free trade deal on 16 December 2021.
There will now be a period of at least three months for Parliament to consider the agreement before it is formally put forward for ratification.
New Zealand
State of play: Negotiations started in June 2020 and agreement in principle was announced on 20 October 2021. This means most of the substance of the FTA has been agreed but that the legal text has not been finalised.
Canada
State of play: the UK-Canada Trade Continuity Agreement of December 2020 rolled over the EU deal. The UK government had wanted to start to negotiate a new and ambitious trade agreement with Canada last year, but this year is more likely.
A consultation on how to improve trade ran from 18 May to 12 July 2021.
Japan
State of play: in September, the UK agreed its first major trade deal in 47 years with Japan. Based on the existing trade deal with the EU, the government hopes it will increase UK trade with the country by an estimated £15.2bn.
The government claimed the deal improved on the EU deal in areas such as digital and data provisions, services, and tariff reductions on meat and fish.
The deal may also help oil the wheels to the UK’s accession to the CPTPP trade bloc, of which Japan is a member, alongside Australia and New Zealand.
United States
State of play: a deal with the UK’s single biggest individual country trading partner was dangled by Brexiters as one of benefits of Britain being in charge of its own trade policy.
However, US president Biden has proved less receptive to the idea than predecessor Donald Trump. Boris Johnson’s visit to the US in September 2021 did not advance the cause.
In the meantime, the UK has looked to state level deals with California and New York among others, and is hoping to bring the ongoing tariff dispute over steel and aluminium exports to a conclusion with renewed talks.
Mexico
State of play: the UK had a roll-over deal in place and an agreement to update on 1 June 2022. Like Canada, it hopes to commence negotiations in 2022 and has run a consultation asking for views on how trade could be improved or amended.
It was briefly mooted that the UK could try and join the US-Mexico-Canada trade deal as hopes of striking a swift standalone trade agreement with the US faded.
Gulf Co-operation Council (GCC)
State of play: in October 2021, the government launched a consultation on trade with the GCC – which represents six countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The consultation ran until 14 January 2022. Negotiations for a free trade agreement are expected to start this year.
According to Bloomberg, a deal could be done by the end of the year. British trade with the GCC was worth about £45bn in 2019, 7% of the size of Britain’s commerce with the EU in the same year. The EU and the GCC don’t have a free trade agreement in place, despite having been in talks for over 15 years.