Brexit: What trade deals has the UK done so far?

  • UK
Share this with Email Share this with Facebook Share this with Twitter Share this with Whatsapp

Image copyright Getty Images

The free trade deal between the UK and European Union (EU) came into force on 1 January 2021.

What does the agreement mean and what other trade deals has the UK made?

What is a free trade deal?

A free trade deal aims to encourage trade - usually in goods but occasionally in services - by making it cheaper. This is often achieved by reducing or eliminating tariffs - taxes or charges by governments for trading goods across borders.

Trade agreements also aim to remove quotas - which are limits on the amount of goods which can be traded.

Trade can also be made simpler if countries have the same rules, such as the colour of wires in plugs. The closer the rules are, the less likely that goods need to be checked.

Where does the UK trade?. % of total UK trade in 2018. Japan, Singapore and Vietnam are included in the "rest of the world" as their EU trade deals had not come into force in 2018.

Why have tariffs and quotas at all?

While free trade agreements aim to boost trade, too many cheap imports could threaten a country's manufacturers. This could affect jobs.

For that reason a country might choose to put tariffs on car imports, for example, in order to protect local car makers.

What does the EU-UK trade deal mean?

After Brexit happened, the UK and EU needed to decide the rules for their future trading relationship.

This was important because the EU is the UK's largest and closest trading partner.

The trade deal that was agreed prevented any tariffs and quotas being introduced - which would have made it more expensive to trade.

Image copyright Getty Images
Image caption The UK-EU trade deal was announced on Christmas Eve

But not everything is the same as it was before Brexit.

As the UK no longer has to follow EU rules on product standards, businesses will need to get used to new checks. This means more paperwork, which could cause delays if businesses turn up at ports unprepared.

Strict EU laws on animal products also means some UK products can no longer be exported.

The deal also doesn't completely eliminate the possibility of tariffs in future. Both sides will need to stay close to shared rules in areas like workers' rights and environmental protection. If either the UK or the EU shift their rules too far, the other side could introduce tariffs.

What happens to the trade agreements the UK was already part of?

Before Brexit, the UK was automatically part of any trade deal the EU had negotiated with another country. The EU had about 40 trade deals covering more than 70 countries at the time the UK left.

The UK has made deals to continue trading in the same way with 63 of these countries .

However, deals with four countries - Albania, Jordan , Canada and Mexico - have not fully come into force yet. The Jordan deal, for example, will not be in effect until March 2021.

Talks are ongoing with a further five countries or blocs - but the largest agreements have been done.

Any existing EU agreement that was not rolled over, ended on 31 December with trade then taking place on World Trade Organization terms until a deal could be reached.

This means importers face tariffs and extra paperwork. For example, a shipment of bananas arriving into Portsmouth from Ghana was charged a tariff of £17,500 in January.

What about other trade deals?

The UK signed a deal with Japan on 22 October - the first that differed from an existing EU deal. The total value of UK-Japan trade (imports and exports) was £31.6bn in 2019, or 2% of the UK's total trade.

On 31 January, the UK government announced it would apply to join a free trade area with 11 Asia and Pacific nations called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) . Current members include Australia, Canada, Japan and New Zealand.

Separately, the UK government is also holding trade talks with the US, Australia and New Zealand.

Read more from Reality Check

Send us your questions