UK reaches only six no-deal Brexit trade deals

Trade Secretary Liam Fox's announcement that the UK has only signed post-Brexit trade agreements with 6 countries highlights the importance of existing EU agreements to British trade with non-EU countries such as Japan and Turkey.

UK trade containers
Business leaders have reacted with dismay to the announcement by Trade Secretary Liam Fox that, ahead of a possible no-deal Brexit, the UK had reached agreement with only six countries and regions to continue their existing trade deals with the EU.

Liam Fox admits that UK can't replicate the EU's 40 trade deals with 69 nations

Mr Fox predicted in 2017 that, by Brexit day, Britain would be able to replicate the EU's 40 trade deals with 69 nations. But he admitted in parliament on Thursday that progress had been slow and that, crucially, the UK would be unable to roll over an EU trade deal with Japan, which only came into effect last month, by March 29.Additionally, the UK will not be able to enjoy the customs union that the bloc currently has with Turkey.Mr Fox said that reaching a Brexit deal with the EU would solve the problem. He told the BBC, "Of course, we will get access to all the EU's free trade agreements if we leave the EU with a deal, which is the government's policy, and for all those who don't want any disruption, there's one easy way to avoid that, which is to vote for the deal which the prime minister has."In the event of no deal being reached, the UK currently only has trade deals with Switzerland, Chile, the Faroe Islands, the Eastern and Southern Africa group (covering Madagascar, Mauritius, Seychelles and Zimbabwe), Israel and the Palestinian Authority.

Failure to secure trade deals with Japan and Turkey shows risk to non-EU trade

Ben Digby, director of international trade and investment at the Confederation of British Industry, said, “For many firms, confirmation that trade deals with Japan and Turkey will not be rolled over will come as an unwelcome surprise. Many companies are unaware it is not just their relationships with EU customers at risk from a no deal Brexit, but those across the globe.“Individual businesses trading with markets outside the EU would face tariffs worth millions of pounds being slapped on them instantaneously. In total, UK trade deals through the EU span five continents and are vital for the smooth export of our goods and services.“The risk to these agreements is yet another reason why no deal is not an option for the UK and jeopardises jobs in our communities.“It is vital no deal is taken off the table to unlock transition, allowing the UK to remain part of these deals and provide space to agree new arrangements.“Most importantly, compromise must be shown on both sides of the Channel and politicians must work quickly to come to a deal.”

Trade bodies emphasise the importance of avoiding a no-deal

Edwin Morgan, interim director-general of the Institute of Directors, said that while Mr Fox's update was welcome, it came late in the day.He added, "We can only hope that those impacted by the failure to roll over EU trade arrangements with other countries by March 29 will still be able to take appropriate action in preparing for no-deal. They do not have much time.“These agreements may only constitute 11 per cent of UK trade, but if you are one of the companies affected it only matters what proportion of your business could be hit. Any interruption or changes in preferential access to these countries means disruption for business, one of the reasons why a large majority of our members reject no deal as the way forward.“In the absence of any further detail, companies looking at the long list of countries where negotiations are marked as ‘engagement ongoing’ should plan for the worst, as it is impossible to discern from this how close the government is to reaching a deal."

Some businesses unaware they are benefiting from existing EU trade arrangements

Adam Marshall, director-general at the British Chambers of Commerce, described the failure to reach agreement to replicate more EU trade deals, was "extremely disappointing", though not unexpected."This is, unfortunately, yet another example where politicians have overpromised and underdelivered – and it is businesses and consumers both at home and abroad that will pay the price," he said.“The British Chambers of Commerce has warned government for over two years that the replication of EU trade agreements would not be easy. We have also warned politicians that some trading businesses don’t even know they are benefiting from the provisions of these agreements, and will be surprised to see their costs going up or their products treated differently overseas in the unwanted event of ‘no deal’ on March 29.“There are firms now who have shipped their products to important overseas markets like South Korea whose customers may now face higher costs and new administrative burdens and purchases languishing at the dock after March 29. UK firms and their partners have spent time building strong business relationships and will not appreciate sudden and expensive changes in trading arrangements.“It’s time for government to work far more closely with business communities to ensure that more existing agreements are rolled over and their benefits to businesses and consumers preserved. The best way to do this in the first instance is to avoid a messy and disorderly exit from the EU on March 29 – which would see the terms of trade for some businesses worsen overnight.”
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