Guidance
Trade continuity if there's a no deal Brexit
Guidance outlining how the government intends to maintain beneficial trade arrangements.
Free trade agreements
The government is committed to maintaining the benefits to businesses, consumers and investors of the EU trade agreements, even though these trade agreements will no longer apply after 29 March 2019, if there’s a ‘no deal’ Brexit.
As a member of the EU, the UK currently participates in around 40 free trade agreements with over 70 countries.
These free trade agreements cover a wide variety of relationships, including:
- Economic Partnership Agreements with developing nations
- Association Agreements, which cover broader economic and political cooperation
- trade agreements with countries that are closely aligned with the EU, such as Turkey and Switzerland
- more conventional free trade agreements
Preferential market access opportunities for businesses
Our aim is to ensure businesses in the UK, EU and partner countries will continue to be eligible for the range of preferential market access opportunities they are used to.
These can include, but are not limited to:
- preferential duties for goods, which includes reductions in import tariff rates across a wide range of products
- quotas for reduced or nil rates of payable duties, and quotas for more relaxed rules of origin requirements
- enhanced market access for service providers
- access to public procurement opportunities across a range of sectors
- improved protections for intellectual property
How the government is preparing
We are working to bring bilateral UK-third country free trade agreements into force from 29 March 2019, or as soon as possible thereafter.
Our intention is that the effects of new bilateral agreements will be identical to, or substantially the same as, the EU free trade agreements they replace. To complete this work, ministers and officials are engaging regularly with partner countries.
The time at which we reach final agreements with partner countries will depend on our ongoing discussions with them.
Technical differences
The final form of new agreements will depend on ongoing discussions with our trading partners. Users of current free trade agreements may see some practical changes as to how they can make use of preferences under new agreements. This is because technical changes are needed to ensure the agreements operate in a bilateral context.
For example, UK and EU content will be considered distinct and each new agreement will individually specify the origin designations that may be used to qualify for preferences. However, we will aim to limit these changes as far as possible.
WTO Most Favoured Nation Tariff
If arrangements to maintain particular preferences are not in place when the UK leaves the EU, trade would take place under World Trade Organization (WTO) rules until new agreements are implemented.
This means traders would pay the applied Most Favoured Nation (MFN) tariff. The MFN tariff is set by the WTO. It is applied equally to all WTO member countries that do not have preferential arrangements and ensures that the same rate of duty is paid on the same good.
For services, the MFN principle means WTO members are required to grant treatment no less favourable to services and service suppliers of any WTOmember than they grant to like suppliers from any other country.
Independent WTO schedules
We are working closely with fellow WTO members to ensure a simple, fair, and transparent transition in establishing the UK’s independent WTOschedules, in a manner that minimises disruption to our trading relationships.
Keep informed of changes to trade provisions
You will be kept informed of any changes or differences to the agreements.
The Trade Bill contains a reporting requirement, which states that the government must publish a report on any significant changes to the new trade related provisions before these new free trade agreements are ratified. The timing of the final agreements with partner countries will depend on our ongoing discussions with them.
Information about tariffs
In the event of a ‘no deal’ you would know the rate of the MFN tariff before we leave the EU because the government would determine and publish a new UK MFN tariff schedule in advance.
Information on the current tariff rates are freely available to view in the UK’s applied goods schedule and can be found on the UK government’s Tariff Look Up tool.
Further practical information on arrangements for the border, and relevant contact information for guidance can be found in:
- Classifying your goods in the UK Trade Tariff if there’s no Brexit deal
- Trading with the EU if there’s no Brexit deal
The specific commitments for services trade that WTO members apply to trading partners, independently of any preferential arrangements, are set out in each member’s schedule of commitments under the General Agreement on Trade in Services. Some countries have liberalised beyond these specific commitments.
Other trade preferences
The government wants to maintain preferential market access for developing countries, in the event of a no Brexit deal. The UK is currently part of the EU’s Generalised Scheme of Preferences (GSP), which removes or reduces tariffs on imports from developing countries without asking for any market access in return.
The Taxation (Cross-Border Trade) Act enables the government to put in place a UK unilateral trade preference scheme. This will, as a minimum, provide the same level of access as the EU’s GSP, maintaining tariff-free access for Least Developed Countries and offering generous tariff reductions to other developing countries.
The UK is already a full member of the WTO, and negotiations are ongoing for us to become independent members of the WTO Agreement on Government Procurement, on the basis of our current commitments as an EU member state.
Further information
The UK Government and the Swiss Federal Council have approved the transition of a trade agreement. Read about how this will allow businesses to continue trading freely after the UK leaves the European Union.
For further details read:
Contact us if you still have a question about trade remedy provisions after Brexit.
Published 19 December 2018
