The European Commission reports annually on the implementation of its main trade agreements in the previous calendar year. If the UK were to act in accordance with WTO rules, tariffs would apply to most of the products that British companies send to the EU. This would make British goods more expensive and more difficult to sell in Europe. The UK could also do so for EU products if it so wishes. Updated to reflect ongoing trade negotiations with Turkey and Vietnam On 20 January 2019, Liam Fox said he was confident the UK could reiterate the top five trade agreements by 29 March. He said there were 34 free trade agreements that required replication. However, he said that a number of countries “are not ready to prepare for a non-agreement.” The main objective of the parties negotiating a free trade agreement is generally to achieve a substantial improvement in the trade conditions they have, based on their WTO commitments, which effectively serve as a “basis” for discussion (see Brexit questions and answers: WTO rules). For example, with regard to tariffs, WTO members undertake not to impose tariffs on other WTO members from a certain level; these obligations are referred to as the WTO`s “MFN” or “most favoured nation.” A free trade agreement would attempt either to eliminate these tariffs altogether or to eliminate them for goods exchanged between the parties to the free trade agreement in order to significantly reduce the gap. Many of the EU agreements concern less developed countries, which generally have fairly high tariffs on certain products.
In this case, British exporters could lose the advantage of a reduction in preferential tariffs, making them significantly less competitive, particularly compared to suppliers established in the EU. The role of trade agreements in reducing NB and promoting trade facilitation is often underestimated. For goods, for example, it is estimated that ntbs are added to about 10% of the costs. In terms of services, it is not uncommon, in the meantime, for NB to prevent or render cross-border trade totally unprofitable. Similarly, the impact of border bureaucracy on the cost of imported goods is estimated to be between 2% and 15% more. 1) Source of trade statistics: ONS UK Total trade: all countries, not seasonally adjusted from April to June 2020. 3) The United Kingdom signed a trade agreement with Iceland and Norway on 2 April 2019. The agreement was signed to maintain continued trade and was part of preparations for a possible “no deal” Brexit. It will not come into force. The UK`s future relations with these countries are influenced by their relations with the EU, as they are EEA member states.
We will continue to work with Iceland and Norway to determine the most effective method of maintaining and strengthening trade with them beyond the transition period.