07 February 2019

Financial Times: Business expresses fury at UK failure to roll over EU trade deals

The UK government has told businesses it cannot guarantee the British economy will be covered by “most” of the EU’s global network of trade agreements immediately after Brexit — even if parliament approves Theresa May’s divorce deal with Brussels.

[...]The admission by the Department for International Trade that the UK will fail to conclude trade deals with most non-EU countries by the scheduled Brexit date of March 29 infuriated many executives taking part in a briefing.

The DIT told 30 business representatives on Wednesday that, while trade agreements with Switzerland, Israel and some African nations would be wrapped up before Brexit, there was no certainty that other deals Brussels has with countries around with the world could be rolled over or duplicated in time.

Even deals with big trading partners such as Canada and South Korea are in doubt.

The EU has 40 preferential trade agreements covering 71 countries, which the UK needs to roll over whether or not it agrees a withdrawal deal with Brussels.

Participants in the meeting were told its content was confidential, meaning that organisations are not able to brief their members in detail on the government’s lack of preparedness.

“I am particularly worried about small businesses, who may not even know that their trading depends on some of these agreements,” one person at the briefing said, warning that retailers could also be particularly badly affected.

Several participants expressed their frustration at the government’s approach, saying it was irresponsible not to provide a definitive list of countries with which the UK had failed to make an agreement.

The impact of failing to conclude free-trade agreements with partners as significant as Turkey and Japan would seriously affect businesses, many of which may not even be aware of the impact, they said.

The UK has argued that provisions in its draft withdrawal agreement with the EU say that Britain should continue to enjoy the benefits as well as the obligations of trade deals with third parties during the post-Brexit transition period.

Brussels has also said that, under the terms of the deal, it will “notify” other countries that Britain should continue to be treated as if it is still an EU member state during the transition.

However, it is up to individual countries outside the EU to agree to this approach. This means that, even if a withdrawal agreement is concluded in time for 29 March, it does not guarantee the continuation of EU-negotiated trading arrangements with countries outside the bloc. [...]

Full article on Financial Times (subscription required)

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