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BREXIT BRITAIN CREATES MORE GLOBAL TRADE DEALS WORTH BILLIONS



Since Brexit finally came into force at the end of January 2020, there has been a high degree of uncertainty over the impact it will have on UK commerce. The longstanding deals Britain had with the EU are no more, so it’s very much been the case of having to forge new deals free from the bureaucracy coming out of Brussels.

The good news for the UK is that the government is working hard to establish bilateral free trade deals with a number of countries - something that will bring in many billions of pounds in revenue. The negotiations are ongoing and there’s a good deal to be optimistic about - as we look into in more detail now.





THE DEFINITION OF A FREE TRADE DEAL



When we talk about trade deals, what we’re actually talking about are ‘free trade deals’ , but what does that actually mean? Well, it’s an arrangement between all interest parties that seeks to encourage trade between the nations involved, typically concerning goods and services. The terms of said agreements usually involve the reduction of the complete elimination of tariffs or taxes.

Free trade agreements also seek to eliminate quotas, which, in layman’s terms, are the limits imposed on the amount of goods and services that are able to be traded. With all of these barriers removed or greatly reduced, the conditions are created for profitable partnerships to occur.



£1 BILLION TRADE DEAL WITH INDIA



The first example of what we’re talking about is Prime Minister Johnson’s recent announcement of a new trade deal with India that’s said to be worth an impressive £1 billion. Part of this agreement includes an additional £500m of brand new investment coming out of India, with as many as 6,000 new UK jobs being created in the process.

Many were quite vocal about the fact that they believed the UK would struggle to create their own trade deals in the same vein as was possible inside the EU. However, this is not the only front on which Britain is making great strides in replacing the revenue enjoyed whilst in the union.



ONGOING NEGOTIATIONS ON A DEAL WITH THE US



The United States of America is one of the biggest countries that Britain deals with and a free trade agreement could potentially be worth hundreds of billions annually. The likelihood is that if the pandemic hadn’t struck when it did, it would likely already be in place, but the reality is that it didn’t and import/exports with the US dipped sharply during this period as a result.

Previous growth in trade in 2019 was perhaps unsurprisingly reversed in 2020 when the impact of global lockdowns came into effect. President Biden has been far from active since taking office, with public appearances happening far less regularly than any previous White House incumbent before him.

However, whilst the likelihood of any agreement being made in the short-term is questionable, the long-term prognosis of lucrative deal being struck is much, much more positive.



PROFITABLE DEALS WITH ASIA & PACIFIC NATIONS



Another area in which good progress has been made is with countries in Asia and the Pacific nations. As of 22nd of October 2021, the UK signed a free trade deal with Japan that’s believed to be in excess of £31 billion - equating to roughly 2% of the total trade conducted by the UK.

That’s not all though, as a further 11 Pacific and Asian nations are part of the Comprehensive & Progressive Trans-Pacific Partnership (CPTPP), which the UK officially applied to join on 1st of Feb ‘21. Current members of the CPTPP include New Zealand, Japan, Canada and Australia.



AN ABUNDANCE OF OTHER NON-EU AGREEMENTS



The agreements we’ve mentioned so far represent the biggest individual arrangements, however, there is an abundance of deals already in place with a number of other non-EU countries. These trade agreements include but are not limited to:

- Central America £1.2bn
- Eastern & Southern Africa £1.3bn
- Iceland & Norway £21bn
- Israel £4bn
- Southern Africa £8.6bn
- South Korea £11bn

The UK truly is a global trader and this is reflected in the amount of agreements that are already in place. This is just a small selection of the current arrangements that have been agreed, with more being added as time progresses.



NOT FORGETTING THE EU-UK TRADE & COOPERATION AGREEMENT...



What also must not be forgotten is the fact that despite Brexit occurring, the EU still represents by far the biggest trading arena that the UK is involved with. As a result, a deal has since been struck - something that was high profile news last year. Signed back on the 30th of December in 2020, the EU-UK Trade & Cooperation Agreement (TCA) became provisional at the start of 2021 and came fully into force just a few months later on May the 1st.

The EU-UK TCA details preferential agreements in a variety of trade areas, such as intellectual property, digital trade, aviation, road transport, fisheries, social security, public procurement and traditional goods and services. And while it doesn’t come close to the financial integration that the UK had with the EU prior to Brexit, the TCA does provide a sound foundation on which to work.



A PROMISING TIME AHEAD FOR UK TRADE



The ‘remainers’ in the UK who still advocate being part of the EU due to the financial benefits it offers may need to take note that Britain is already showing its ability to stand on its own two feet. Of course, there’s going to be a natural period of adjustment during which the overall level of import/exports may take a hit, however, there’s much evidence pointing towards it being a temporary situation.

As with many things, sometimes they need to get worse before they get better. Having greater control over its own destiny is good news for Britain in the long run, as it will no longer be at the behest of EU rules and regulations. Sure, the road may not be as clear and untroubled as it would have been if Britain had indeed remained, but the doom-mongers seem to have painted a falsely pessimistic picture of the situation.

Only time will tell, of course, but the signs are promising at the very least.



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