The UK Government’s ambition is to secure Free Trade Agreements (FTAs) covering 80% of UK trade within the next three years. The priority is to agree trade agreements with the EU, US, Australia and New Zealand, having already concluded the first post-Brexit trade agreement with Japan in September. The UK is also continuing to negotiate trade agreements to reproduce the effects of EU agreements with countries when they no longer apply to the UK at the end of 2020.
Negotiations are coming to a head in order to find a trade deal between the UK and the EU that can be put in place when the transition period ends on 31 December 2020. At the end of the ninth round of negotiations at the beginning of October Michel Barnier, the EU negotiator, spoke of persistent serious divergences on matters of major importance for the EU: dispute resolution, state aid and fisheries. These remain the main sticking points.
Trade negotiations were formally launched between the UK and the US in early May 2020 and four rounds of talks have taken place. Progress has been made but UK hopes of arriving at a deal before the US presidential election in November have faded. The most difficult issues are access for agricultural products, food standards, pharmaceuticals and rules of origin. Although leading figures in Donald Trump’s administration had previously said that a US-UK trade deal was a top priority, Boris Johnson’s proposal to go back on aspects of the Withdrawal Agreement has angered top Democrats including presidential candidate Joe Biden and Speaker of the House of Representatives Nancy Pelosi and damaged the prospects of a UK-US deal.
Negotiations for a free trade agreement with Australia were launched on 17 June 2020 and two rounds of talks covering all topics have been completed with a third round expected in November. The UK believes an FTA with Australia could increase UK exports to Australia by up to £900 million.
A first round of negotiations with New Zealand was held in July 2020. The UK Government believes that a UK-New Zealand FTA could increase UK exports to New Zealand by up to £100 million. Both countries want to be particularly ambitious in areas including enhancing digital trade, boosting cross-border trade in services and investment, reducing uncertainty and burdens on exporters from customs procedures, and promoting good regulatory practices.
The UK and Japan agreed a free trade agreement on 11 September 2020, the UK’s first major trade deal as an independent trading nation. The agreement will be finalised and ratified over the coming months. It goes beyond the EU-Japan agreement in areas like digital and data, financial services, creative industries and food and drink. (For further details see Country profile). The deal is also seen as an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The UK took a step towards membership of the CPTPP in September with discussions between UK trade officials and negotiators from all 11 members of the Partnership on potential UK accession.
Trade agreements with non-EU countries
Trade agreements that have been signed and are expected to take effect from 1 January 2021 when existing EU trade agreements no longer apply to the UK are listed here (www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries). Also listed are the trade agreements still in discussion with countries where there are existing EU trade agreements in place. If an agreement with these countries is not reached by 31 December 2020, trade with other WTO members will take place on WTO terms.