Jeremy Miles, Counsel General and Minister for European Transition
From 1st January 2021, EU trade agreements no longer apply to the UK. The UK Government has sought to reproduce the effects of trading agreements that previously applied to it to ensure continuity for UK businesses. Initially, the UK Government had aimed to replicate all of the EU-negotiated trade agreements – around 40 agreements involving over 70 countries - by the end of the Transition Period. Trade with these countries accounted for around 12.5% of total Welsh goods trade in 2019.
To date, 32 agreements have been formally signed with approximately 61 countries; a full list is provided at annex A. We welcome this as it will reduce disruption for Welsh businesses trading with these markets. However not all existing agreements have been replicated. Continuity agreements are not in place with Algeria, Bosnia and Herzegovina, Serbia, Albania, Jordan, Ghana or Montenegro.
Of the 12.5% of trade in Welsh goods which had access to preferential terms for non-EU trade when the UK was a member of the EU, approximately 11% of Welsh trade in goods is now covered by the agreements which were signed by 1 January 2021. That leaves around 1.5% of Welsh trade in goods–Due largely to trade with Algeria which accounts for 1.2%.
It is also important to note that not all the agreements reached cover exactly the same range of issues as the EU agreements they replace. For example, the agreement with EEA/EFTA countries only covers goods so an agreement on services will need to be negotiated in future if the UK service sector is not to lose market access. Moreover, some of the agreements are not yet fully in force so there are bridging mechanisms in place to ensure trade can continue with minimal disruption. Most importantly of these is the Trade Agreement with Canada, where there is a Memorandum of Understanding between the parties will maintain tariff-free trade until the full trade agreement can be approved by the Canadian and UK Parliaments. There are also several agreements containing review clauses, meaning negotiations will be reopened again in the future.
These agreements of course sit alongside the EU – UK Trade and Cooperation Agreement which provides tariff and quota free access for UK exports to the EU, but which will also result in a series of significant new non-tariff barriers to trade. Exports of goods to the EU currently account for 58.5% of all Welsh goods exports.
Status of Continuity Agreements
Preferential arrangements which will not be in place on January 1st
- Bosnia & Herzegovina
Preferential arrangements in force or in effect on January 1st
- Antigua and Barbuda
- St Christopher and Nevis
- St Lucia
- Dominican Republic
- St Vincent and the Grenadines
- Trinidad and Tobago
- Central America
- Costa Rica
- El Salvador
- Cote d’Ivoire
- Faroe Islands
- North Macedonia
- Papua New Guinea
- Solomon Islands
- Palestinian Authority
- South Korea
- South Africa
Continuity deals with re-negotiation clauses
- South Korea