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Vaughan Gething, Minister for Economy

First published:
21 June 2021
Last updated:

I welcome the announcement made on 4 June by the UK Government that an in principle agreement has been reached on a UK-EEA EFTA (Norway, Iceland and Liechtenstein) Free Trade Agreement (FTA).  The deal expands on the previous goods-only continuity agreement in force by including arrangements covering trade in services and further tariff reductions on some food imports and exports.

Prior to 1 January 2021, our trading arrangements with EEA EFTA states were governed by an EU agreement which the UK sought to replicate by the end of the transition period to provide continuity for businesses.  The resulting goods-only deal, signed on 8 December 2020, included a review clause to ensure the agreement would be renegotiated and aligned with future UK-EU trading arrangements, and preserve and protect the EEA-EU trading relationship.

Trade in goods with Norway and Iceland accounted for 1.6% of Welsh goods trade in 2020. This is compared to the EU that accounts for 49.4% of Welsh goods trade.  No data is available on the value of trade between Wales and Liechtenstein. 

This new agreement results from renegotiations and aligns trading arrangements with the terms of the UK-EU Trade and Co-Operation Agreement (TCA). This means there will be minimal changes for our businesses already trading with Norway, Iceland and Liechtenstein.  It is positive that the deal includes dedicated chapters on digital trade and small businesses.  This is the first time any trade agreement with these three European countries has included standalone chapters covering these areas. 

Officials are considering the details of the agreement to fully understand the impact on Wales, and identify potential opportunities for Welsh businesses.