Brexit: UK-EU Trade Deal yet to be made, but agreements reached with Canada and Japan
03 December 2020
As it currently stands, if a deal is not reached between the UK and the EU on the subject of trade, then the UK could potentially see itself trading with the EU under the rules as laid out by the World Trade Organisation.
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There has, however, been some progress on the UK’s trading relationships with a few major trading partners. On 23 October 2020, the UK Government and Japan signed a new trade agreement which was the UK’s first major trade deal as an independent trading nation. The deal means that 99% of UK exports to Japan will have no tariffs imposed, which it is anticipated will result in an annual boost of over £15 billion to trade between the two countries. Within the agreement, there is also the promise that Japan will support the UK and join the Trans-Pacific Partnership, which is one of the world’s biggest free trade areas, which covers 13% of the global economy, and did more than £110 billion of trade in 2019.
An arrangement has also been made with Canada, so the existing trading relationship, worth £20 billion per year, will continue. Negotiations have begun in relation to a new, different deal which could be implemented from as early as 2021. This agreement draws the UK closer to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Canada is also a member of. CPTPP assists businesses in securing additional opportunities in 11 key Pacific markets and is a key part of the UK’s trade negotiations agenda.
Talks are still underway between the UK Government and countries that do not have EU trade deals at present – this includes the US, Australia and New Zealand. US president, Joe Biden, has linked a UK-US trade deal to maintaining peace and stability in Ireland. This has resulted in further emphasis being placed on the UK Internal Market Bill and how it affects Northern Ireland, which is surrounded by controversy, and is the subject of a formal infringement process against the UK by the EU.
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