Trade deals between countries are commonly done to encourage trade between the participating countries by making goods and services cheaper. The UK’s trade deals are not an exception to this.
During their time as a member of the EU, the UK was automatically part of the trade deals which the EU had with other countries.
Now that the UK is no longer part of the EU, how have the trade talks post-Brexit unfolded and what trade deals have the UK done so far?
On 24th December 2020, a trade and cooperation agreement was sealed between the UK government and the EU. The draft trade and cooperation agreement includes a free trade agreement which covers not only the trade of goods and services, but also a broad range of other interest areas, such as investment, state aid, and tax transparency.
Want a more in-depth breakdown of the deal? Head to our Guide.
On 21st November 2020, the UK and Canada agreed on negotiating a new bilateral trade deal in 2021 based on the terms of the CETA trade agreement between the EU and Canada. The deal will ensure that the current trade between the UK and Canada will be able to continue even after the UK leaves the EU on 1st January 2021. The UK and Canada are also going to be negotiating a new trade deal in 2021 which will focus on digital trade and the environment.
The UK and the US are currently negotiating the possibility of a deal to reduce trade tariffs between the two countries. The UK recently stated that they are dropping tariffs on subsidies for aerospace firms as an attempt to reach a post-Brexit trade deal with the US. Representative of the current US administration stated that though it is likely that a deal will be made in the near future, “tough compromises” will have to be made, such as on agricultural issues.
Experts believe that the trade negotiation between the UK and China will not be an easy one. Taking into consideration the current geopolitical climate between the two countries, partly caused by the decision to prevent Huawei from providing core components to the UK’s 5G network and the UK’s criticisms regarding the treatment of ethnic minorities in China, the trade negotiation will only get harder.
A new trade agreement between the UK and Japan has been signed, allowing 99% of UK exports to enter Japan free of tariffs.
Norway & Iceland
In December 2020 a trade deal between the UK, Norway and Iceland was signed. The trade deal concerns the trade of goods and ensures that 95% of the trade with Norway and 90% of the trade with Iceland will continue to be tariff-free.
The UK and Switzerland signed their post-Brexit trade deal in February 2019, way ahead of the UK formally leaving the EU almost a year later. This trade deal is said to be a “continuity agreement”, meaning that the trade between the UK and Switzerland would continue as before even after the UK leaves the transition period in January 2021.
For more updates and resources, head to our dedicated Brexit section.