Trade Deals Around the World: July Edition
Trade Deals Around the World is our periodic update, which gives you a quick and easy overview of what has been happening in the many trade deal negotiations worldwide.
We focus on the European Union and the United Kingdom and keep an eye on China and the United States.
The European Union and the United Kingdom
The situation in Ireland seems to be slowly deteriorating. There are shortages in supply for some goods in Ireland because the United Kingdom is delaying the implementation of agreed Brexit strategies.
The border with Ireland is different from the border with other European Union members because of the precarious relationship between Ireland, which is part of the European Union, and Northern Ireland, which is part of the United Kingdom.
Newsweek reports on the issue:
The row centers on provisions of the Brexit deal that essentially created a regulatory border between Northern Ireland and the rest of the United Kingdom. That angered many pro-British residents of the territory who reject anything that threatens their status as part of the U.K.
The protocol requires Britain to check certain goods shipped to the region from elsewhere in the U.K.
Earlier this year, Britain unilaterally delayed some of those inspections, saying it needed more time to put the right systems in place. The EU threatened legal action over what it saw as a breach of Britain's international obligations. Now the U.K. government is considering further delays.
Von der Leyen told reporters that the EU has "shown flexibility, we will show flexibility, but the protocol and the (Brexit) Withdrawal Agreement has to be implemented completely."
The United Kingdom and Norway, Iceland and Liechtenstein
The United Kingdom is still working on the long list of free trade agreements it needs to close, now that the trade agreements it was part of as a member of the European Union no longer apply. A crucial part of the trade deals with Norway and Iceland is the ability for companies to use state of the art electronic documentation. The Guardian reports:
Under the deal, Norway has reduced its duties in 26 areas of agriculture... to avoid full 277% export tariffs.
Norway’s government, meanwhile, celebrated securing the same trading relationship in goods with the UK as the EU under its trade and cooperation agreement.
This UK-EEA free trade agreement provides better trading conditions than World Trade Organization terms, though with considerably more trade barriers when compared with the previous single market relationship.
The United Kingdom and Cameroon
The United Kingdom also signed a trade agreement with Cameroon. The deal is not yet ratified. The British government explains the current status of the agreement:
The UK-Cameroon EPA did not enter into force from 1 January 2021. Instead, it is being provisionally applied, pending the completion of domestic ratification procedures. To bridge the gap between the end of the post-Brexit transition period and provisional application, both the UK and Cameroon had committed, through a Memorandum of Understanding, to maintain the effects of the EU-Central Africa iEPA from 1 January 2021, and apply the tariff preferences from the UK-Cameroon EPA.
Read all you need to know about the trade agreement here.
The United Kingdom and CPTPP
The United Kingdom wants to join the pacific trade deal. Reuters reports:
Member nations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) ... agreed to allow Britain to start the process of joining the pact…
The CPTPP removes 95% of tariffs between its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia. Unlike the EU, it does not aim to create a single market or a customs union, and it does not seek wider political integration.
Britain made a formal request to join the trade deal in February. It will supplement bilateral deals Britain has, or is seeking, with member states. Britain struck its first major post-Brexit deal on trade with Japan last October.
CNN meanwhile reports:
...trade experts say that joining the CPTPP will yield only very modest economic benefits, and won't make up for the hit to Britain's trade caused by exiting the European Union.
The United Kingdom and Singapore
The United Kingdom is negotiating a digital trade agreement with Singapore. BusinessNewsWales reports:
The UK is the first European country to start negotiations on a Digital Economy Agreement (DEA). Singapore and the UK are both global leaders in the digital economy and 70% of UK services exports, from financial and legal services to music streaming and e-books, were digitally delivered to Singapore in 2019, worth £3.2 billion.
The DEA would open further opportunities for British businesses to deliver their services through digital trade. It would help cut red tape and ensure companies can trade more efficiently through digital technology such as electronic transactions, e-signatures and e-contracts.
Other News on Trade Agreements
The last item in this monthly re-cap of global trade news is an excellent overview of China’s trading relationships with its neighbouring countries.