As of 1st January 2021, the UK finally left the European Union which resulted in breaking EU trade agreements between the two parties most commonly known as ‘Brexit’. The UK and EU were forced to agree on how trading would be carried out in the future. The EU was and still is the nearest and leading trade partner for the UK. Before exiting the EU, the UK was forced to strike a deal with the EU to ensure that goods and services transported from EU countries into Britain were kept at a low cost – without this deal, it would have meant the price of goods in stores would skyrocket and could severely affect the UK economy.
Although at this stage it may seem as though not much has changed as a result of Brexit, there is set to be more pressure placed on the shoulders of businesses. The UK will no longer be abiding by EU guidelines in regard to product checks and safety. For UK businesses, this will mean substantial internal checks will need to be carried out to meet the relevant health and safety regulations. As well as this, animal products from the UK will no longer be permitted to be shipped overseas.
The free trade deal was agreed on 24th December and employed on the 1st of January. The deal was intended to foster goods and services trading and make it less expensive, as well as preventing restrictions on the amount and type of goods and services which can be traded. This type of economic development is the reason why trading forms like Spread betting in UK has grown in popularity.
Just days ago, Britain and Mexico also signed a deal to continue trading, despite the UK’s decision to leave the EU. It is expected that between 2021-2022, the relationship between the two countries will become stronger.
At the current stage, the UK is still in discussions with 6 additional countries.
Trade Secretary Liz Truss verified that the UK had made a major trading agreement with 11 counties – branded the ‘Superdeal’.
The UK is now expected to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) very shortly; which is compromised of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The government commented that this move had been Boris Johnson’s priority in his plan after the UK had left the EU and has already made numerous deals with several of the countries listed to boost its chances of getting accepted.
However, there are also benefits for the CPTPP too – it has been stated that if the UK were to join the mega-bloc, the global economy would increase by an impressive 16%.
Truss said: “We will shortly submit our formal request to join this free trade area”.
If the UK is accepted into the ‘superdeal’, 95% of UK exports would not have a tariff charge.
Truss continued that there are many advantages of the UK being a part of the ‘superdeal: “The benefits are there to see, whether it is the deeper access to nearly £9 trillion of GDP covered by its members, the modern rules of origin, the 95 percent tariff-free trade on goods traded between members from cars to seafood, or the modern standards in services, data and digital trade.
“These modern standards would play to the UK’s strengths as a global hub for services and technology trade. We are already the second-largest exporter of services globally, and third in the world for billion-dollar “tech unicorn” success stories.
“Together, we can help set the standard for trade in the 21st century, promote higher standards in green trade and pile pressure on the World Trade Organisation to reform.”
Speaking in the House of Commons, Ms Truss acknowledged that her department had obtained several trading deals in just 24 months.
She said: “In under two years we have agreed trade deals covering 63 countries, plus the EU that account for £885billion.
“That is unprecedented. No other country has ever negotiated so many trade deals simultaneously. “In 2021 we will be adding to these deals.”
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