Preparing for EU Exit: Trade Agreement Continuity
Trade agreements set out preferential rules that cover trade between two or more countries. They aim to make trading easier between those countries by reducing barriers on imports and exports of goods and services.
During the transition period businesses have still been able to directly utilise existing EU trade agreements. However, this will change from 1 January 2021.
Under the Protocol on Ireland/Northern Ireland contained within the Withdrawal Agreement, Northern Ireland is part of the customs territory of the UK. This means from 1 January 2021 businesses in Northern Ireland can only utilise trade agreements which the UK has in place with other countries or trading blocs.
The UK has been working to reproduce the effects of existing EU trade agreements to ensure continuity of trading arrangements. Work is still ongoing in this area and, at the time of writing, agreement has been reached to transition 22 EU trade agreements.
What happens to EU trade agreements after the end of the transition period on 31 December 2020?
These new UK-third country agreements are expected to take effect from 1 January 2021 and include agreements with South Korea, Switzerland and the Southern Africa Customs Union and Mozambique (SACUM) trading bloc.
The UK government is still engaging with third countries to transition a further 16 EU trade agreements. These include Canada, Mexico, Singapore and Turkey.
If agreement is not reached to transition any of the remaining EU agreements by 31 December 2020 then trading with the relevant countries and trading blocs will take place on WTO terms from 1 January 2021.
What action should businesses take?
You should review your goods and services supply chains for both for imports and exports to determine if trading is conducted using EU trade agreements.
Where EU trade agreements are used you should check if the UK has transitioned that agreement and, if not, review the implications of trading on WTO terms and take appropriate actions. Some businesses may, for example, be able to absorb the impact of potential increases in tariffs whilst other may need to review supply chains.
You should also consider signing up for the Trader Support Service (TSS) if you have not already done so. TSS is open to traders, intermediaries and carriers moving goods into and out of Northern Ireland. It is a free-to-use service and will support businesses with the changes to Northern Ireland trade which take effect on 1 January 2021. It will provide guidance and training, a digital service to support declarations, and support from customs experts.
We also have a programme for free webinars on topics relating to the EU Exit:
EU Exit Series | Advice Clinics - 05 November 2020
EU Exit Webinar | Changes to Chemicals Regimes REACH / CLP / PIC - 16 November 2020
EU Exit Webinar | Changes to Chemicals Regimes BPR / PPP / POPs - 20 November 2020