Government publishes approach to post-Brexit trade deal with the EU
What is the Government’s approach to a post-Brexit trade deal with the EU?The key takeaways
The UK Government seeks to proceed with EU trade deal negotiations, aiming for a free trade agreement along the lines of the EU-Canada agreement or the EU-Japan agreement.
The UK left the EU on 31 January 2020 and entered an 11-month transition period. During this time, the Government and the EU have been negotiating a trade deal, which if not concluded, will result in the UK trading with the EU under World Trade Organisation rules.
After a third round of talks in May, the Government published a set of 13 documents setting out the UK’s approach to the future relationship with the EU. This is set against the backdrop of COVID-19 which has imported a sense of urgency into talks as economic uncertainty affects companies and economies across Europe.
The approach taken by the UK is very much along the lines of negotiating a free-trade agreement, similar to those concluded between the EU and Canada, Japan and South Korea. However, it has not proposed to establish new trading relationships in respect of all sectors in one agreement. Rather, it considers that separate agreements may be required for fisheries, law enforcement and more technical areas including aviation, energy and civil nuclear co-operation.
Points of particular importance to organisations with a technological focus include a desire to incorporate provisions relating to electronic authentication similar to those which have evolved in EU agreements with Australia and Mexico in the proposed UK-EU trade deal. The principle of frictionless data-flow in the digital economy was reiterated and should underpin any future trade agreement.
The Government also considers provisions relating to cross border trade in services should ideally be along the lines of those in CETA and the EU-Japan EPA, promoting ongoing liberalisation for trade in services and investment.
The Government holds up CETA and the EU-Japan EPA as a suitable precedent for a substantial number of other areas to be negotiated across multiple sectors.
Why is this important?
For companies engaging in cross border trade, Brexit is likely to be an industry defining event, the consequences of which will be determined by the trade deal struck between the EU and the UK.
Adapting to the new status quo may involve relatively minor adjustments in business practices for some, and significant upheaval for other businesses depending partly on the degree to which their activity is underpinned by EU regulation.
Any practical tips?
Whilst there is still a great deal of uncertainty surrounding trade talks, it is still important to keep up with developments to best manoeuvre one’s business in relation to the evolving situation.