Trade Deals Around the World: May 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.
In this edition, we focus on the European Union, the United Kingdom, and the largest trade deal the world has ever seen…
The United Kingdom and the European Union
It has been five years since the British people took a vote on whether to leave the European Union or not. The result of the vote was that the United Kingdom was to leave the European Union, which officially did on January 1st of this year. Until the last moment, it was unclear whether there would be a trade deal between the European Union and the United Kingdom. A disastrous no-deal Brexit was avoided at the last minute.
The United Kingdom had already ratified the agreement, and near the end of last month, the European Union finally ratified it as well. Read more about the effects of the agreement on trade between the UK and the EU here.
The United Kingdom and Australia
The United Kingdom and Australia are close to a trade agreement. The deal is expected to be signed in June. Bloomberg reports:
“We have made major breakthroughs over the past few days, and an agreement is now in sight,” International Trade Secretary Liz Truss said in a statement Friday. “We will spend the next few weeks ironing out details and resolving outstanding issues, with a view to reaching a deal by June.”
Britain is also in talks with the U.S. and New Zealand, plus it wishes to join an 11-country pact which includes Singapore, Malaysia and Japan. The U.K. is hoping renegotiated trading relationships will offset the negative consequences of quitting the EU’s single market and customs union, which is expected to leave Britain’s economy 4% smaller than it would’ve been compared to staying in the EU, according to the Office for Budget Responsibility.
The United Kingdom and Mexico & Mexico and the EU
Both the United Kingdom and the European Union have signed trade agreements with Mexico. According to FreshPlaza, the United Kingdom closed a trade agreement with Mexico based on the agreement that was already in place with the European Union.
The European Union closed a new trade agreement with Mexico, with better terms than the previous trade agreement. FreshPlaza reports:
A £5 billion EU continuity trade deal with Mexico, which UK government officials have hailed as an “Aztec Brexit Boost”, has now become obsolete after the EU signed a more generous and comprehensive deal between its 27 members states and Mexico.
According to a new report from the House of Lords’ International Agreements Committee, the UK might have to wait another three years to catch up with the EU, even if talks on a new agreement begin this year.
The United Kingdom and Serbia
The British government has announced that the United Kingdom and Serbia have signed a trade agreement. The agreement is based on the agreement that was in place between the European Union and Serbia. Read more on gov.uk.
The UK and Serbia have signed a Partnership, Trade and Cooperation Agreement to ensure £682m trade can continue and grow between the two countries.
The Agreement secures continued preferential trade access between the UK and Serbia with significant savings for business to support jobs and the wider economy. It also sets out how the two countries will strengthen political, economic, security and cultural ties, and reaffirms the UK’s support for governance reform in Serbia that will safeguard its competitive business environment and open, democratic society.
The preferential trading terms secured by the Agreement will enable British business to trade as they did before 1 January 2021.
The United Kingdom and who’s next
According to the Institute of Export & International Trade, New Zealand or Australia is next. The negotiations for a trade agreement with the United States are lagging.
“I have trouble seeing how the Biden administration makes this work in the next two years,” said Simon Lester, the associate director of the Center for Trade Policy Studies at the Washington-based Cato Institute…
Other News on Trade Agreements
- Óscar Guinea, an economist at the think tank European Center for International Political Economy, pleads in favour of ratification of the trade agreement between the European Union and Mercosur on the El País website.
- JD Supra reports on a trans-Atlantic truce. The United States and the European Union have agreed to suspend tariffs to resolve the dispute over aircraft subsidies.
- Japan has approved the worlds largest free trade agreement. Fifteen countries in the Asian region have signed the Regional Economic Partnership (RCEP). The GDP of the signatory countries is equivalent to 30 percent of the global economy. In comparison, the agreement represents about 28 percent of world trade and a market of about 2.2 billion people, around a third of the world’s population. Read more in La Prensa Latina.