The UK’s rolled-over deals after the Brexit transition

UK trade agreements with non-EU countries on January 1, 2020

Find and replace: some continuity agreements are detailed, others just replace EU with UK

By Peter Ungphakorn
POSTED JANUARY 1, 2021 | UPDATED FEBRUARY 4, 2021

On January 1, 2021, Britain left the EU Single Market and customs union. That meant the EU’s free trade agreements with non-EU countries no longer applied to the UK.

The British government has negotiated, at speed, “roll-over” agreements with those non-EU countries in order to reproduce the effects of those agreements as much as possible so that continuity is maximised for UK business.

This article does not look at the contents or depth of the deals. It simply counts how many of the EU’s free trade agreements have been “rolled over” into continuity agreements with the UK, and how many have not been done.

We should bear in mind that:

  • some continuity agreements do not replicate the EU’s free trade agreements in full. It may depend on rules of origin, and any sectors, regulations, mutual recognition agreements that are not covered
  • trade figures cited are for total trade, not trade affected by the continuity deals

All these agreements are subject to WTO rules: Article 24 of the General Agreement on Tariffs and Trade (GATT, for goods) and, if relevant, Article 5 of the General Agreement on Trade in Services (GATS).

Notified: the UK’s agreement with the EU and its 30 continuity deals with non-EU countries have been circulated for scrutiny in the WTO | WTO database
Notified: the UK’s agreement with the EU and its 30 continuity deals with non-EU countries have been circulated for scrutiny in the WTO | WTO database (click the image to see it full size)

By February 2, 2021, all the UK’s concluded trade agreements had been notified to the World Trade Organization (WTO). That includes the 30 continuity agreements. Also notified is the 2020 Christmas Eve UK-EU post-transition agreement together with the 2019 Withdrawal Agreement, which the is partly incorporated into it.

Other members will ask questions. The deals will be discussed in the Regional Trade Agreements Committee (which means free trade agreements, particularly in goods) and the Services Council if the agreement includes services.

This is for transparency. The WTO and its members do not approve free trade agreements. But if any member believes an agreement violates WTO rules it can challenge the countries in the agreement legally through WTO dispute settlement — for example if the deal on goods does not cover “substantially all the trade” or the one on services does not have “substantial sectoral coverage” .

The following information is taken from the UK government’s website on January 1, 2021.

Summary

Done deals
Number of countries: 60
Number of agreements: 30
Full ratification: with 31 countries
Provisional application: with 21 countries
Bridging mechanism: with 8 countries
Total trade (goods and services) with those countries: £174 billion

Signed, but not fully in effect
3 countries — Canada, Jordan, Mexico

Not done: still talking
3 WTO members—Albania, Ghana, Montenegro
3 countries not WTO members—Algeria, Bosnia and Herzegovina, Serbia

EU customs unions (except Turkey)
2 countries: Andorra (except agricultural products); San Marino (all products) — provided they reciprocate for the UK

Mutual recognition agreements
Signed stand-alone MRAs: 3 countriesAustralia, New Zealand, US
Covered in trade agreements: 3 countriesSwitzerland, Israel, Japan

Note that the contents of the rolled-over agreements can differ considerably.

For example, the agreement with Japan is detailed and runs to 1,100 pages.

The one with Canada contains a main text of only five pages, essentially incorporating the EU-Canada deal (CETA) into the UK-Canada relationship.

An annex of around 100 pages follows. It is essentially lists of “find and replace” or “find and delete”, so that references to the EU in the CETA text are changed to UK equivalents, dates are changed and some other provisions are tweaked or removed. It’s impossible to read as a stand-alone agreement.

Continuity locations: map of UK continuity agreements, by Bloomberg
Continuity locations: map of UK continuity agreements, from this Bloomberg article
Details

The following tables and text are copied directly from the UK government website, to make a snapshot of the information as it was on January 1, 2021:

Trade agreements that took effect from 1 January 2021Back to top

Agreements with the following countries and trading blocs took effect from January 1, 2021. Where the agreement has not yet been ratified, provisional application or bridging mechanisms have been put in place to ensure continuity of trade.

AgreementCountryEntry into effect mechanism (1)Total UK trade with countries, 2019 (£ million) (2)
Andean countriesColumbiaBridging mechanism2,876 (total for Andean countries)
Andean countriesEcuadorFull ratification2,876 (total for Andean countries)
Andean countriesPeruBridging mechanism2,876 (total for Andean countries)
CameroonCameroonBridging mechanism200
CARIFORUM trade blocAntigua and BarbudaProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocBarbadosProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocSt. Kitts and NevisBridging mechanism3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocBelizeProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocBahamasProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocSaint LuciaProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocDominicaProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocDominican RepublicProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocGrenadaProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocJamaicaProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocSt. Vincent and the GrenadinesProvisional application3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocTrinidad and TobagoBridging mechanism3,046 (total for CARIFORUM trade bloc)
CARIFORUM trade blocThe Republic of GuyanaProvisional application3,046 (total for CARIFORUM trade bloc)
Central AmericaCosta RicaFull ratification1,411 (total for Central America)
Central AmericaEl SalvadorFull ratification1,411 (total for Central America)
Central AmericaGuatemalaFull ratification1,411 (total for Central America)
Central AmericaHondurasFull ratification1,411 (total for Central America)
Central AmericaNicaraguaFull ratification1,411 (total for Central America)
Central AmericaPanamaFull ratification1,411 (total for Central America)
ChileChileFull ratification2,171
Côte d’IvoireCôte d’IvoireFull ratification398
Eastern and Southern Africa (ESA) trade blocMauritiusFull ratification1,569 (total for Eastern and Southern Africa trade bloc)
Eastern and Southern Africa (ESA) trade blocSeychellesFull ratification1,569 (total for Eastern and Southern Africa trade bloc)
Eastern and Southern Africa (ESA) trade blocZimbabweFull ratification1,569 (total for Eastern and Southern Africa trade bloc)
EgyptEgyptProvisional application3,503
Faroe IslandsFaroe IslandsFull ratification293
GeorgiaGeorgiaFull ratification183
Iceland and NorwayIcelandProvisional application26,747 (total for Iceland and Norway)
Iceland and NorwayNorwayProvisional application26,747 (total for Iceland and Norway)
IsraelIsraelFull ratification5,014
JapanJapanFull ratification14,676
Kenya (3)KenyaBridging mechanism1,407
KosovoKosovoFull ratification10
LebanonLebanonFull ratification849
LiechtensteinLiechtensteinFull ratification159
MoldovaMoldovaProvisional application395
MoroccoMoroccoFull ratification2,251
North MacedoniaNorth MacedoniaProvisional application1,774
Pacific statesFijiProvisional application232 (total for Pacific States)
Pacific statesPapua New GuineaProvisional application232 (total for Pacific States)
Pacific statesSamoa (4)Bridging mechanism232 (total for Pacific States)
Pacific statesSolomon Islands (4)Bridging mechanism232 (total for Pacific States)
Palestinian AuthorityPalestinian AuthorityFull ratification9
SingaporeSingaporeProvisional application17,636
South KoreaSouth KoreaFull ratification11,777
Southern Africa Customs Union and Mozambique (SACUM) trade blocBotswanaFull ratification11,875 (total for SACUM trade bloc)
Southern Africa Customs Union and Mozambique (SACUM) trade blocEswatiniFull ratification11,875 (total for SACUM trade bloc)
Southern Africa Customs Union and Mozambique (SACUM) trade blocLesothoFull ratification11,875 (total for SACUM trade bloc)
Southern Africa Customs Union and Mozambique (SACUM) trade blocMozambiqueFull ratification11,875 (total for SACUM trade bloc)
Southern Africa Customs Union and Mozambique (SACUM) trade blocNamibiaFull ratification11,875 (total for SACUM trade bloc)
Southern Africa Customs Union and Mozambique (SACUM) trade blocSouth AfricaFull ratification11,875 (total for SACUM trade bloc)
SwitzerlandSwitzerlandFull ratification37,063
TunisiaTunisiaFull ratification561
TurkeyTurkeyProvisional application18,559
UkraineUkraineFull ratification1,566
VietnamVietnamProvisional application5,706
Table copied from this page on January 1, 2021

Notes
1) Provisional application is a method well established in international treaty practice to bring agreements into effect ahead of entry into force. Bridging mechanisms are an alternative means to ensure continuity of trade, where the UK or treaty partners are unable to fully ratify or provisionally apply an agreement. These non-binding mechanisms include Memoranda of Understanding or Exchange of Diplomatic Notes which will ensure continuity of trade.

2) Source of trade statistics: ONS UK total trade: all countries, non-seasonally adjusted April to June 2020.

3) This agreement is open to accession by other members of East African Community.

4) Samoa and the Solomon Islands have not yet acceded to the Pacific States-UK Interim Economic Partnership Agreement (pending a decision on their accession), however preferences under the agreement will take effect on 1 January 2021 through a Memorandum of Understanding.

Signed trade agreements, not fully in effectBack to top

There are some trade agreements the UK has signed which are partially applied or have not fully taken effect.

AgreementInformation on entry into effect
CanadaExpected to enter into effect in early 2021. Preferential tariff rates will be applied from 1 January 2021
JordanExpected to enter into effect in early 2021. Trade will take place under WTO terms (Generalised Scheme of Preferences for imports)
Mexico (1)Expected to enter into effect in early 2021. Preferential tariff rates will be applied from 1 January 2021
Table copied from this page on January 1, 2021

Notes
(1) The UK has committed to apply preferential tariff rates on goods imported into the UK from Mexico from 1 January 2021. In return, Mexico has committed to implement a tariff rebate scheme, so that as soon as the Trade Continuity Agreement enters into force in Mexico, any businesses that have paid tariffs on goods which would attract a preference under the agreement, between 1 January and the agreement coming into force will be able to get a refund.

Trade agreements still in discussionBack to top

The following agreements are still under discussion with countries where trading agreements were in place before 1 January 2021.

For these countries:

Country or blocStatus of discussions
AlbaniaEngagement ongoing, agreement will not be in place for 1 January 2021. Trade expected to take place under WTO terms.
Algeria (1)Engagement ongoing, agreement will not be in place for 1 January 2021. Trade expected to take place under WTO terms (Generalised Scheme of Preferences for imports).
Bosnia and Herzegovina (1)Engagement ongoing, agreement will not be in place for 1 January 2021. Trade expected to take place under WTO terms.
GhanaEngagement ongoing, agreement will not be in place for 1 January 2021. Agreement expected to be completed shortly (2). Trade expected to take place under WTO terms (Generalised Scheme of Preferences for imports).
MontenegroEngagement ongoing, agreement will not be in place for 1 January 2021. Trade expected to take place under WTO terms.
Serbia (1)Engagement ongoing, agreement will not be in place for 1 January 2021. Trade expected to take place under WTO terms.
Table copied from this page on January 1, 2021

Notes
(1) Algeria, Bosnia and Herzegovina and Serbia are not members of the World Trade Organisation. UK exports will be subject to partner country national legislation.

(2) On 31 December 2020 the UK and Ghana issued a joint statement. This announced that both sides had reached a consensus on the major elements of a trade agreement. Both sides are committed to making the gap in preferences as short as possible.

Trading with countries in Customs Unions with the EUBack to top

Andorra and San Marino are part of customs unions with the EU. The UK has agreed with the EU that all products originating in San Marino and all non-agricultural products (chapters 25-97) originating in Andorra will be treated as originating in the EU under the UK-EU Trade and Cooperation Agreement as long as Andorra and San Marino apply to UK products the same preferences that the EU applies to them. These products will benefit from zero tariffs, where they meet the relevant rules of origin. Trade with Andorra of agricultural products (chapters 01-24) is not in scope of the UK-EU Trade and Cooperation Agreement and will revert to WTO terms.

Mutual recognition agreementsBack to top

A mutual recognition agreement (MRA) is one in which countries recognise the results of one another’s conformity assessments.

A conformity assessment is a set of processes that confirm whether a product meets the specified legal requirements. This can include testing, inspection, and certification.

The UK has signed MRAs with:

MRA coverage in trade agreementsBack to top

The UK’s trade agreement with Switzerland incorporates elements of the EU-Switzerland MRA.

The UK’s trade agreement with Israel covers conformity assessment of industrial products. This means that existing arrangements with Israel will continue after 31 December 2020.

The UK-Japan CEPA replicates the effects of the existing EU-Japan MRA.


See alsoBack to top

This piece started out as a Twitter thread:


Updates:
February 4, 2020 — adding WTO notifications
January 4, 2021 — adding Bloomberg’s map

Image credits:
Woodcut handshake used in montage | Oberholster Venita via Pixabay CC0
Maps: WTO and Bloomberg

Author: Peter Ungphakorn

I used to work at the WTO Secretariat (1996–2015), and am now an occasional freelance journalist, focusing mainly on international trade rules, agreements and institutions. (Previously, analysis for AgraEurope.) Trade β Blog is for trialling ideas on trade and any other subject, hence “β”. You can respond by using the contact form on the blog or tweeting @CoppetainPU