Following the end of the Brexit transition period, the UK has embarked on its journey to enhance its trading opportunities around the world.
As a courtesy of its former membership with the EU, the UK does not have to start every trading deal from scratch, as deals with some countries have been renegotiated on the basis of their existing trade agreements with the bloc at the time when the UK was still a member.
Nevertheless, efforts are currently being made by the UK to expand the scope of its trade further around the world, including future trade agreements with countries such as Australia, New Zealand and the US.
At the time of the UK’s departure from the EU, the bloc had around 40 trade deals with more than 70 countries. While EU agreements no longer apply to the UK, it has managed to ensure the continuity of trade by renegotiating separate agreements with the majority of those countries. Where the actual agreement has not been ratified because of time constraints imposed by the Brexit deadline, the UK Government has agreed either its provisional application or a bridging mechanism to prevent any obstacles to the continuation of trade.
In addition, it emerged back in October 2020 that the UK had signed a trade deal with Japan, followed by a further announcement in January 2021 that the UK was applying to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Not every aspect of the UK’s journey to forge new trade relationships has gone as smoothly as expected, however. It emerged last month that the US was no longer prioritising the signing of its free trade deal with the UK. Instead, it was announced that the Biden administration was planning to concentrate its efforts on battling the COVID-19 pandemic, and that the trade talks with the UK would have to be reviewed because of the UK’s having entered into two agreements with the EU since the talks between the two countries began in 2018.
At first, it appeared that the UK Government’s hopes of propping up the UK’s image in a post-Brexit world seemed to have been dented somewhat in light of this development, not least because of the UK’s own attempts to go ‘the extra mile’ to secure a trade deal with the US by unilaterally dropping some tariffs during the last days of the Trump administration. Whilst no similar response on tariff removal was forthcoming in the immediate aftermath of the move, it has now emerged that the Biden administration has agreed to do so for a period of four months in relation to tariffs of 25% that were imposed by the US on imports of scotch whisky.
The tariffs in question, which also affected other goods such as fabric cashmere and stilton cheese, had been imposed by the Trump administration as part of a dispute over state subsidies in the airspace industry between the US and EU while the UK was still a member.
Notwithstanding the apparent reconciliatory tone being adopted by the Biden administration, it has been agreed by experts and other observers that this move is unlikely to serve as the precursor to a separate trade deal being concluded between two countries in the near future.
Moreover, whilst it is estimated that the economic benefit of any trade deal may not in fact bring massive gains for the UK, any efforts to negotiate would involve bargaining on politically sensitive matters such as maintaining high food and animal welfare standards, and allowing American companies to supply goods and services to the NHS.
The urgency for a separate trade deal can also be questioned in light of the Biden administration’s efforts to reverse his predecessor’s legacy by rejoining various international agreements that had been departed from during the Trump presidency. Whilst there is no indication whether the US was seeking to re-join the CPTPP, any move in that regard would arguably obviate the need for a separate trade deal between the UK and US at least in the short term, provided that the UK’s accession to the CPTPP had taken place as planned.
There have also been calls for the UK to step up its global efforts in services and digital trade. The Financial Times has argued that by enhancing its international presence, the UK can become a trading bridge for countries or blocs that do not have separate trade agreements between each other. Although such aspirations are consistent with the overall narrative of establishing ‘Global Britain’, any potential conflict of memberships would have to be reviewed according to the actual provisions of agreements from which the UK was seeking to benefit at the relevant time.
The information in these blogs is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss, which may arise from accessing, or reliance on information contained in these blogs. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
©Gherson 2021