Q: What will be the position regarding International Trade Agreements in the event that the UK leaves the EU without a deal?
A: In the event that the UK leaves the EU without a deal, trade agreements that the UK is part of as an EU member state will no longer apply. The UK government have advised they are working on new agreements to replace EU trade agreements after Brexit. Gov.uk lists trade agreements that have been signed and will take effect as soon as the UK leaves the EU or are still under discussion.
Some new agreements will not be in place before the UK leaves the EU. Trade will then take place on World Trade Organization (WTO) terms.
The UK already trades with many countries on WTO rules, as part of the EU. Examples include United States, Brazil, Australia. In fact, it's any country with which the EU (and therefore the UK) has not signed a free trade deal. That's when WTO rules kick in. But it's more complicated than that. Those big economies don't just rely on WTO rules - each one also has agreements with the EU on top of that. The US, for example, has at least 20 agreements with the EU that help regulate specific areas of trade, covering everything from wine and bananas to insurance and energy-efficiency labelling.
In the event of a no-deal Brexit, (and an abrupt change in relations), the UK is working to replicate the deals the EU currently has with the rest of the world. As an EU member, the UK is currently part of about 40 trade agreements that the European Union has with more than 70 countries. The UK government has recently signed continuity deals with some of these countries, the most significant of which is Switzerland. But it has also said that deals with countries such as Japan and Turkey will not be concluded in time for Brexit.
Gov.uk have published a list of Trade Agreements that have been already signed in anticipation of UK leaving the EU. The list of Trade Agreements with the following countries and trading blocs will take effect when the UK leaves the EU:
- Andean countries
- CARIFORUM trade bloc
- Central America
- Eastern and Southern Africa (ESA) trade bloc
- Faroe Islands
- Iceland and Norway
- Pacific states
- Palestinian Authority
- South Korea (agreed in principle and expected to sign shortly)
More information is available on gov.uk. Keep updated by subscribing to free of charge Brexit email alerts on gov.uk
For the countries other than listed above trade agreements still in discussion. If the UK leaves the EU without trade agreements in place, trade with these countries will take place under WTO rules.
More information is available on gov.uk. Keep updated by subscribing to free of charge Brexit email alerts on gov.uk or www.essexchambers.co.uk
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