Last reviewed 13 April 2022

A target of 80% of UK trade to be covered by free trade agreements (FTAs) by the end of 2022 has been set by the Department of International Trade. The House of Commons Public Accounts Committee (PAC) in a report published in March said that represented a significant challenge.

As of January 2022, 64% of UK trade was covered by FTAs including the UK-EU Trade and Cooperation agreement which represents 47% of UK trade. The PAC also warns that the FTAs may not deliver actual economic benefits unless support is given to help businesses to use the agreements, particularly smaller businesses.

Already this year the UK-New Zealand trade deal was signed in February as well as the UK-Singapore Digital Economy Agreement. This year will also see negotiations with Canada, Mexico, India, Israel, the countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and with the Gulf Cooperation Council. Negotiations on a trade deal with the US are paused but the Government is seeking to promote trade with the US through US/UK dialogues on the future of Atlantic Trade and is also pursuing a state-by-state approach to allow the UK to trade more at a state level with large economies such as California.

UK-New Zealand FTA agreed

The trade deal with New Zealand signed in February will remove trade barriers on a range of UK goods and services and provide new opportunities for British businesses. In 2020 the UK-New Zealand trade relationship was worth £2.3 billion and it is now expected to increase by almost 60%. Tariffs will be eliminated on all UK exports to New Zealand, customs procedures will be modernised, UK professionals will be able to work in New Zealand more easily, red tape will be reduced for the 5900 small businesses that export to New Zealand and flexible rules of origin will give British exporters an advantage over international rivals.

UK-Singapore Digital Economy Agreement (DEA)

This deal, signed in February, strengthens the UK’s trading relationship with Singapore which was worth £16 billion in 2020. It ends outdated rules that affect both goods and services exporters. The UK has negotiated ambitious digital provisions in its trade agreements with Japan, Australia and New Zealand and will be pursuing advanced digital chapters in negotiations with Israel, Canada and Mexico this year.

Negotiations on a new modernised trade deal launched with Canada

These negotiations will build on the existing UK-Canada Trade Continuity Agreement signed in 2020 and go further in areas such as innovation, digital, data, the environment and women’s economic empowerment. Trade with Canada was worth over £19 billion a year in 2020. Benefits will include a boost to the UK services sector by making it easier to trade in Canada, especially in areas like research and development, legal services and finance; reducing barriers for goods exporters; stimulating more Canadian investment in the UK, helping women access the full benefits of trade; enhancing co-operation on tackling climate change.

UK moves to final phase of accession to CPTPP

The UK in February moved into the second and final market access phase of negotiations for accession to the CPTPP. Negotiations will now begin in which the UK will agree new trading relationships with CPTPP countries which could lead to 99.9% of UK exports to CPTPP being eligible for tariff-free trade. Other benefits could include new guarantees of access to services markets; ensuring UK businesses are in a better position to expand their digital reach; making it easier for some UK exports to qualify for preferential tariff treatment and increasing demand amongst CPTPP members for imports of UK goods.