Brexit: Trade deals signed with a week to go – less than 15 per cent replaced
As a European Union member, the UK is automatically part of about 40 trade agreements which the EU has with more than 70 countries worldwide.
About 44% of UK exports in goods and services went to other countries in the EU in 2017/18—£274 billion out of £616 billion total exports.
If the UK leaves the EU without a deal on 29 March, it would lose these trade deals immediately.
To avoid this, Theresa May’s government says it wants to replicate the EU’s trade agreements “as far as possible” and have them ready to go in the event of a no-deal Brexit.
Liam Fox, the international trade secretary, told MPs in January last year that the government wanted to achieve “continuity and stability” by ensuring that the UK would continue to benefit from these arrangements.
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With little more than a week to go, trade deals actually signed are, to say the least, worrying.
In total, trade deals actually signed amount to £40 billion, which equals slightly less than 15 per cent currently enjoyed by being an EU member state.
A very long way to go
The UK has (so far) only agreed to a handful of “continuity” deals. Yesterday, Liam Fox excitedly stated that – “Our negotiators have just initialled (not signed) a trade agreement with Iceland & Norway for the European Economic Area. This is the 2nd biggest agreement we’re rolling over and trade with EEA is worth nearly £30bn. This is on top of the agreement we’ve signed with Liechtenstein.”
Others signed up so far include:
- Pacific Islands (signed 14 March)
- Israel (18 February)
- Palestinian Authority (18 February)
- Switzerland (11 February)
- The Faroe Islands (1 February)
- Eastern and Southern Africa (31 January)
- Chile (30 January)
The agreements vary in scope but they include relaxing certain rules, reducing taxes (tariffs) on imports and exports, or granting easier market access.
On 21 February, the government released a statement saying it would not be able to replicate the EU’s free trade deal with Japan by 29 March. Other agreements that won’t be ready on Brexit day, according to the statement, are Turkey, Andorra and San Marino.
In the meantime, very embarrassingly, the UK’s application to the WTO was refused and could now take years, or according to the WTO boss – decades even.
Deals Actually Signed prior to EEA
In 2017, total trade (imports and exports) between the UK and the region was worth around £369m.
According to the Office for National Statistics (ONS), total trade between the UK and Israel was worth £3.9bn in 2017.
Total trade between the two was £25m in 2017, according to ONS figures.
The Department for International Trade says that trade between the UK and Switzerland was worth £32.1bn in 2017 – accounting for about 2.5% of total UK trade.
The Faroe Islands
The Faroe Islands is the UK’s 114th largest trading partner, according to the government. Total trade between the two countries was worth £236m in 2017.
Eastern and Southern Africa
Trade between the Eastern and Southern Africa (ESA) region was worth £1.5bn in 2017 – about 0.1% of total UK trade. The UK-ESA deal covers Madagascar, Mauritius, Seychelles and Zimbabwe.
Signed at the end of January, the UK-Chile trade arrangement was the first to be done. Total trade between the UK and Chile was £1.8bn in 2017.