UK-EU TRADE DEAL AFTER BREXIT
After several months of negotiations and numerous missed deadlines, there was significant doubt in the run-up to December 31st, 2020, over whether the EU and UK could achieve an agreement on the parameters for their future commercial relationship.
However, UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed to continue negotiations, and a deal was reached just hours before the Brexit transition period expired.
The UK-EU trade agreement allows the country to continue doing business with its largest and closest trading partner without imposing additional tariffs and quotas, allowing the value of goods exchanged to remain relatively constant.
However, in order for commerce to continue, firms in the UK and the EU will need to adjust to new logistical, legal, and administrative hurdles, including as an increase in paperwork and customs checks.
Additionally, several products, including a variety of animal products, won’t be permitted to be exported to the European Union since the United Kingdom will stop adhering to EU product standard laws.
Finally, even while additional tariffs are not currently in effect under the UK-EU trade agreement, they might be in the future if the UK decides to depart too far from EU norms in areas like worker rights and environmental protection, or the other way around.
THE UK AND THE US HAVE SIGNED A CUSTOMS AGREEMENT
Jesse Norman, the UK Treasury’s finance secretary, and US Ambassador Robert Wood Johnson signed a Customs Assistance Agreement (CAA) between the two countries to ensure continued smooth trade after Brexit’s departure from the EU.
According to Norman, the bilateral customs agreement will also allow the two countries to continue their collaboration in combating customs fraud by exchanging data among UK and US customs officials, and “provides the legal framework for programmes to simplify trade flows for importers and exporters.”
Wood Johnson went on to say that the agreement allows the UK and the US to continue working together “to stop criminals trafficking illegal goods across the Atlantic – from guns to drugs, illegal wildlife products, and even counterfeit medicine” and “to keep countries in both our countries safe.”
The agreement also serves as the foundation for the Authorised Economic Operator Mutual Recognition Arrangement, a globally recognised quality mark that enables enterprises to benefit from customs benefits and attests to their compliance with global customs standards.
THE UK AND VIETNAM’S FREE-TRADE DEAL
The UK negotiated a free-trade agreement with Vietnam in the closing weeks before the Brexit deadline.
The two countries’ free-trade agreement will save Vietnam £114 million ($151 million) in tariffs on exports by the time the accord is completely implemented. The United Kingdom is expected to save over £36 million on exports.
Since August 2018, negotiations have been underway. The new agreement took effect on January 1, 2021, when Vietnam’s previous agreement with the EU no longer applied to the United Kingdom.
Because the UK and Vietnam are significant commercial partners, establishing a free-trade agreement after Brexit was advantageous to both parties. The third-largest trading partner in Europe for Vietnam in 2019 was the UK, with exports to that country totaling more than 4.5 billion pounds. On the other hand, the UK shipped to Vietnam items valued over 600 million pounds.
According to Liz Truss, the UK’s Secretary of State for International Trade, the agreement with Vietnam would also:
“Open the door for new digital alliances and joining the TPP… this will play to the U.K.’s strengths, as we become a hub for technology and digital trade with influence far beyond our shores, defining our role in the world for decades to come.