Trade Deals Around the World: January Edition
Trade Deals Around the World is our monthly recurring update, which gives you a quick and easy overview of what has been happening in the many trade deal negotiations going on around the world.
We are at the start of a new year. 2020 was quite the year with Brexit and COVID and both will play a significant role in supply chains across the world in 2021 as well.
The trade news in December was dominated by the Brexit negotiations and the Trade and Cooperation Agreement that the European Union and the United Kingdom agreed on just before Christmas. After a quick recap of what we already published on that, we will move on to other trade deal negotiations.
The United Kingdom and the European Union
In case you missed it here is what we already shared about the Trade and Cooperation Agreement between the United Kingdom and the European Union:
Brexit deal: What does it mean for business? - in which we explain what a Canada-style trade deal is and we point out the main changes for business.
The EU-UK Brexit Deal and Its Implications for Businesses - a more elaborate explanation of steps companies need to take when importing and exporting between the European Union and the United Kingdom.
Preferential Treatment for Imports and How to Prove Origin - an explanation on how to import goods into the European Union from the United Kingdom and vice versa using preferential rates.
Brexit: New Rules and Regulations for EU-UK Trade - a short article stressing the importance of MRNs and EORI numbers.
The United Kingdom and Singapore
The deal will cover a trade relationship worth more than $22bn (£17bn). The agreement largely mirrors an existing deal between Singapore and the European Union (EU).
It is part of a broader set of trade negotiations for the UK, as it tries to replicate trade pacts which will cease when the EU transition period ends.
In 2019, the UK sold just under £9bn pounds worth of goods and services to the island. But what the deal lacks in size, it might make up in symbolism. The two countries have always had strong historical links.
Read the full story by the BBC here.
The United Kingdom and Japan
Japan's parliament on Friday completed ratification of a free trade deal with the U.K., a key move for supporting Japanese auto companies, railcar makers and other industrial groups through Britain's looming exit from the European Union.
The economic partnership agreement, set to take effect Jan. 1, saves Japanese manufacturers operating in the U.K. from a Brexit "cliff edge" at the end of this month.
The economic partnership agreement will abolish tariffs on industrial goods imports and exports in terms of quantity and value. Tariffs on Japanese exports of passenger cars to the U.K. will be cut stepwise until they are eliminated in 2026 -- just like Japan's arrangement with the EU
Read the full story by NikkeiAsia here.
The United Kingdom and Kenya
Kenya signed a trade agreement with Britain on Tuesday to ensure the uninterrupted flow of goods between the two nations once Britain transitions out of European Union trading arrangements on Dec. 31, Kenyan officials said.
It mirrors an existing deal between East African nations and the EU through which Kenyan goods now access the British market.
Kenya’s neighbours, which are a part of the East African Community (EAC) trade bloc, will be free to join the trade deal if they wish to, Kenyan officials said.
Kenya is the only country in the EAC not classified as a least developed nation, meaning it had to hurriedly craft a new deal to keep exporting to Britain.
Read the full story by Reuters here.
The United Kingdom and Norway
Norway's Ministry of Trade and Industry inked an interim trade continuity agreement with the United Kingdom and Iceland on Tuesday, effective Jan. 1, until a comprehensive free trade agreement is in place.
The agreement means no new tariffs will be imposed on industrial goods after Brexit.
Read the full story by IntraFish here.
The United Kingdom and Canada
The Canadian government has introduced a bill to implement the newly inked post-Brexit trade agreement with the United Kingdom, Global Affairs Canada said in a statement.
The agreement is expected to enter into force on January 1 after the United Kingdom formally leaves the European Union.
The trade agreement will ensure the continued levy-free exchange of more than USD 22 billion in goods between the two countries, according to Canada's foreign ministry.
Read the full article by Business Standard here.
The United Kingdom and Turkey
Turkey and Britain signed a free-trade agreement Tuesday as the U.K. prepares to leave the European Union’s economic orbit at the start of the new year.
The deal, which will come into effect on Jan. 1, aims to support trade between the two countries which was worth more than $25 billion in 2019. It is one of many post-Brexit trade deals the British government is pursuing with nations around the world and came days after it finalized a trade agreement with the EU.
Read the full article by the Seattle Times here.
The United Kingdom and Vietnam
Britain and Vietnam signed a free trade agreement on Tuesday, Vietnam’s trade ministry said, days before Britain completes its transition out of the European Union.
The deal, which will for Britain replace the existing EU-Vietnam Free Trade Agreement (EVFTA), will take effect on Dec. 31, the ministry said in a statement.
Tuesday’s deal will ensure Britain does not lose access to preferential tariffs in one of the fastest growing and most open economies in Asia.
The free trade agreement with Britain has the same provisions as those of EVFTA, the ministry said. EVFTA came into effect in August and was due to cut or eliminate 99% of tariffs on goods traded between Vietnam and the EU.
Read the full article by Reuters here.
The United Kingdom and the United States (No Deal Yet)
Britain’s hopes of securing an early trade deal with the US have been dashed by a warning from Joe Biden, the president-elect, that America will not sign a trade deal with anyone until the US has sorted out its competitiveness.
Britain had been closing in on a trade deal with the administration of Donald Trump, a fierce opponent of the European Union, but Biden has said in a New York Times interview that his priorities will be to improve investment in US manufacturing and the protection of American workers.
“I’m not going to enter any new trade agreement with anybody until we have made major investments here at home and in our workers and in education,” he said.
Read the full article by The Guardian here.
Other Trade Deals
Now that the United Kingdom is no longer a part of the European Union it is also no longer a part of any trade deal that the European Union has. No wonder we are seeing so many new trade deals being closed by the United Kingdom.
There was also some news on other trade deals last month.
The United States and Ecuador have closed a mini trade deal, as Reuters reports:
The United States and Ecuador on Tuesday signed a protocol on trade rules and transparency, a move welcomed by business groups in both countries, but U.S. industry officials said more work was needed to reach a comprehensive trade agreement.
Biden has promised not to kill the Phase 1 trade deal with China immediately. Reuters reports:
“I’m not going to make any immediate moves, and the same applies to the tariffs. I’m not going to prejudice my options,” President-elect Biden told Friedman.
Biden said he would pursue policies targeting China’s “abusive practices,” such as “stealing intellectual property, dumping products, illegal subsidies to corporations” and forcing “tech transfers” from U.S. companies to Chinese counterparts.
In the meantime, China has vowed to uphold the trade deal during the Biden Administration. Reuters reports:
“He definitely re-committed. On the Chinese side, it’s all systems go. They will fulfil their commitments,” US-China Business Council President Craig Allen told Reuters on Monday.