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Britain risks losing the benefits of EU trade deals with more than a dozen countries on January 1 as time runs out to replace the deals Brussels has with governments around the world.
The UK Department for International Trade said “engagement was ongoing” with 15 countries with which the EU has agreements, with only a few weeks left until Britain’s post-Brexit transition period expires at the end of the year.
Liz Truss, the secretary for international trade, hopes that an agreement with Canada can be signed before Britain exits the EU trade deals on December 31, and British officials believe there is also an external possibility of reaching an agreement with Singapore on the line.
Pacts
These agreements would join the agreements the country has reached with key trading partners, including Japan and Switzerland.
But negotiations are also open with other economies, including Mexico, Vietnam and Egypt, three countries whose combined trade relationship with the UK was worth close to £ 12bn (€ 13.2 million) in 2019 for goods alone. If there are no deals with them by January 1, trade conditions would revert to World Trade Organization basic terms, with higher tariffs on UK imports and exports.
The EU has 44 preferential trade agreements in force with individual states or regional trade blocs, covering 77 countries in total. More are in the pipeline: Brussels is negotiating with Australia and New Zealand and has reached an agreement with the South American bloc Mercosur that is pending ratification.
They are a subset of the 750 agreements that the EU has negotiated with other governments around the world, ranging from trade to fishing struggles to cooperation in the management of hazardous nuclear materials. The UK will automatically lose the rights and benefits of these deals when the post-Brexit transition period ends on January 1.
Truss argues that the UK has been very successful in renewing the EU’s trade agreements, effectively copying their terms to apply to the UK after Brexit; The government says it has in principle signed or agreed to trade deals with 52 countries, with those trade relationships worth £ 146bn a year in 2019.
Agreement
Countries already covered by the new agreements include South Korea, Israel, Iceland, Norway, Morocco, Switzerland, and South Africa. Truss also signed a replacement version of the EU trade agreement with Japan last month, and the government announced on November 3 that an agreement had been reached with Kenya.
Of the 15 countries where the UK is still looking to renew or replace UK agreements, Canada is the largest, with more than £ 18bn of bilateral trade in goods with the UK in 2019. Justin Trudeau, Prime Minister Canada said on Oct. 29 that he was “very optimistic” that a renewal deal would be concluded on time.
But in some cases the talks have been complicated by uncertainty surrounding future UK-EU relations negotiations.
Britain and Switzerland, for example, have concluded a series of new agreements ranging from trade to road transport to citizens’ rights. But Bern has warned that “it may be impossible to completely close the legal gaps in some areas” if the UK and the EU fail to agree to harmonize certain regulations. Possible problem areas include the coordination of social security arrangements for cross-border workers and customs procedures.
Talks
Similarly, talks with Turkey are complicated by the fact that the country is in a customs union with the EU.
Britain has also concluded replacement agreements in other areas, for example by signing and ratifying new bilateral agreements on the handling of nuclear materials with Canada, Australia and the United States.
The UK has concluded the necessary replacement agreements to ensure the continuity of civilian nuclear trade after the end of the transition period, ”said a British government official.
The UK’s progress on renewing agreements has been aided by the fact that Britain’s original date of departure from the EU was delayed from March 2019 to January 2020, with a transition period extending up to end of this year.
David Henig, a leading post-Brexit trade expert, said: “They have made good use of the additional 18 months. It’s a decent record but not a great one. “
Truss said in a recent speech at Chatham House: “It is the government’s ambition to secure free trade agreements with countries covering 80 per cent of UK trade by 2022.”
That would require Britain to conclude a trade deal with the EU before the end of the year, but Truss is also trying to secure deals with Australia and New Zealand.
Talks with the United States on a trade deal have been suspended pending the outcome of the presidential election. – Copyright The Financial Times Limited 2020
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