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A Guide to EU and UK trade agreements post-Brexit
Since the 2016 referendum, the decision by the United Kingdom to leave the European Union has dominated a significant part of commercial activity in the UK and impacted on our daily lives. Businesses across the United Kingdom and the European Union (EU) are discovering how the exit affects trade, with many concerns about tariffs and contractual changes. Following the end of the Brexit transition period, trading with EU countries has changed for UK businesses, and the new trading landscape can be challenging.
In this guide, we explain how Brexit has affected UK trade, what current trade agreements are in place, and how these changes affect UK businesses.
Click on a link to that section:
Learn how EU and UK exporters and importers have been affected since Brexit
The trade agreements and negotiations that have taken place since Brexit
Supply chain issues to tariff and Customs concerns, how UK businesses have been affected
The new legalities when trading in the EU
How our qualified team of legal experts can help
We answer your frequently asked questions
How has Brexit affected UK and EU trade?
Prior to Brexit, the EU was the UK's biggest trading partner and the latest figures suggest that this is still the case; in 2019, the EU accounted for 48.1% of UK foreign trade in goods. The value of trade between the UK and EU countries has been predicted to increase. Food prices have increased by 6% due to trade barriers now implemented. Although the UK is now free to trade on their own terms, trade between the UK and the EU has been a big subject of debate for businesses.
What trade agreements are currently in place since Brexit?
Since leaving the EU, the UK have signed various agreements to secure trade with EU member states. These include:
The EU-UK Trade and Cooperation Agreement (TCA)
The TCA came into force in January 2021 and highlighted trade negotiations between the UK and the EU post-Brexit. It is a free trade agreement that prevented any new tariffs and quotas being introduced, making it less expensive to trade. However, it does not eliminate the possibility of tariffs in the future. Stricter laws have been introduced on animal products, and new checks for product standards have been introduced. The UK's departure from the EU single market has delivered consequences that are not addressed in the TCA such as the potential impact on contracts and UK jurisdiction in court cases.
EU trade rollover
Before Brexit, as an EU Member State, the UK automatically became a part of any trade deal the EU negotiated. Since leaving the EU the UK has negotiated approximately 40 agreements with 70 countries and also managed to rollover existing deals with 63 of the 70 countries.
Deals with non-EU countries
Since Brexit, the UK has signed three new international trade deals with Australia, New Zealand and Singapore, the latter being a digital trade agreement. The agreements are not yet in force.
If you have become involved in a legal dispute surrounding trade with an EU country, you can contact us today for a consultation.
How do these changes affect UK businesses?
Since the TCA does not address issues relating to contracts or jurisdiction, it is hard to predict how cross-border trade deals between businesses in the UK and the EU will be affected. UK businesses or individuals involved in cross-border commercial disputes no longer have reciprocal enforcement of court orders across EU jurisdictions. Therefore, the choice of jurisdiction is important and can help avoid the possibility of litigation taking place in a challenging jurisdiction. It is wise to enshrine jurisdiction clauses in the contract stating the jurisdiction in which a dispute should be litigated, should one arise.
Almost all industries have been affected by Brexit, from a shortage of workforce to economic impacts. Key issues that have been identified include:
- Regulation: the UK largely works towards EU standards, especially in terms of food. Although it is likely UK businesses will still follow these regulations, they no longer have the ability to shape the policy behind them.
- Supply chains: Brexit has increased the risks of higher costs. Businesses should reassess their supply chains and re-negotiate contracts
- Customs: importers and exporters face additional paperwork and delays
You can discover more about the implications of Brexit on our website.
Factors to be aware of when trading in the EU
Individuals and businesses trading with the EU need to be aware of what the TCA means for their business. Here are some key points for businesses to remember:
- Import tariffs will not apply in most cases, but customs formalities such as declarations for imports and exports will apply. Businesses must pre-register goods to limit congestion at ports
- Goods originating in the UK-EU free trade area will not face custom duties (Rules of Origin). Goods that fail to satisfy this origin status will be subject to tariffs. Movement of goods for repair will not face custom duties, and no export duties or taxes may be placed on the other party's goods
- Bilateral culmination of origin applies; this means that EU materials used in UK products and vice versa count as originating material
- Imports into the EU are subject to import VAT
You can read the agreement in full here.
How can Giambrone and Partners help me?
Understanding the complexities of new EU trade agreements can be challenging, and could lead to misunderstandings. Our qualified cross-border lawyers will help you understand everything you need to know to help you avoid any difficulties. If you are involved in a dispute with your trading partners in the EU, we can help access your claim and help build your case and obtain resolution by implementing alternative dispute resolution and avoiding litigation wherever possible.
Get in contact today to book a consultation with our expert team.
Common queries
How much does the UK trade with the EU?
The EU is the UK's largest trading partner. In 2020, UK exports to the EU were £251 billion, and imports were £301 billion.
Does the UK have a trade deal with the EU?
Following Brexit, the Trade and Cooperation Agreement was set up to establish free trade between the UK and the EU. It prevents any new tariffs or quotas from being introduced.
How many UK businesses export to the EU?
The Government predicted in 'indicative estimates' that around 11% of the 5.4 million businesses in the UK export to the EU. A definitive number is not available.