Trade agreements the UK has signed since Brexit – is opportunity knocking for your business?

Trade agreements the UK has signed since Brexit | Bridgehead Agency

Trade agreements which lower barriers to international business are essential for companies seeking to expand globally. In a recent survey by the British Chambers of Commerce, [1] it unveiled that 48% of SMEs cited tariffs as the top barrier to exporting. Trade agreements often make exporting simpler by cutting red tape. In this blog, we summarise the trade agreements the UK has signed with North America, Europe and Australisia since Brexit.

New trade deals in Australasia

The UK signed post-Brexit free trade agreements with Australia and New Zealand which came into force on 31 May 2023. Zero tariffs will apply on UK exports to Australia and New Zealand. Critically, Australia and New Zealand are both members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The UK joined the CPTPP

The UK and eleven CPTPP member countries reached an agreement for the UK to join the CPTPP with the deal signed in July 2023. The existing trade bloc members are:

  • Australia;
  • Brunei;
  • Chile;
  • Japan;
  • Malaysia;
  • Mexico;
  • New Zealand;
  • Peru;
  • Singapore;
  • Vietnam;
  • Canada.

With a focus on zero-tariffs, over 98% of goods traded between members qualify for tariff-free trade. Input from any CPTPP member also counts as originating for rules of origin, so components for a final product can come from other member nations tariff-free. And for service providers eyeing expansion, businesses don’t need to have a local office or reside in a country to supply services.

The UK signs Memorandum of Understanding (MoU) with 5 US States

The US is the top UK trading partner across most sectors. MoUs have been signed with five US states to promote open communication and cooperation. The most recent was signed between Utah and the UK in June 2023 with a focus on aerospace, supply chain resilience and life sciences. The Utah MoU is the first to cite fintech as a focus for cooperation.

Since Brexit, state-level agreements have been signed with South and North Carolina, Indiana and Oklahoma. There are also potential MoUs on the horizon with California, Florida, New York and Texas. In our guide to a successful USA expansion, we emphasise that each US state is heterogeneous, therefore, we recommend creating a separate go-to-market strategy for each state you want to enter.

Atlantic Declaration Unveiled

In June 2023, US President, Joe Biden and Prime Minister, Rishi Sunak cemented a new UK-US economic relationship with the Atlantic Declaration. The UK government hails it: “A new action plan for cooperation on the biggest economic challenges of our time.”

It outlines both countries’ collaboration on key issues in tech, clean energy and minerals. Along with addressing AIs safe and responsible development, the deal is likely to facilitate trade of goods including electric vehicle batteries.

What’s the new trade agreement between the UK and the European Union (EU)?

The EU and the UK trade relationship is now governed by the EU-UK Trade and Cooperation Agreement which came into force on 1 May 2021. The free trade agreement addresses cooperation on economic, social and environmental issues. It also incorporates elevated preferential arrangements for trade in goods, services, intellectual property and transport.

Trade deals and agreements can reduce tariff barriers and remove obstacles to make stepping into foreign markets more attractive. However, the lack of an agreement needn’t strike a country off your target list. From experience, we know research and local knowledge inform successful go-to-market strategies. Ready to press ‘go’ on your global plans for growth? Get in touch.

References:

[1] https://www.britishchambers.org.uk/news/2022/10/removing-trade-barriers-key-to-boosting-export-growth-of-uk-businesses