Operate after Brexit

Trade with third countries

Trade with third countries

EU free trade agreements that offered Scottish businesses preferential terms no longer apply. The UK has agreed continuity agreements with some countries, but not all, so in some cases the levels of coverage will now be different.

Existing UK trade agreements with non-EU countries

The UK Government has been negotiating 'rolling over existing EU trade agreements and secure continuity of trading arrangements for Scottish businesses. For any countries that the UK does not establish a continuity deal with, that trade will revert to WTO 'Most Favoured Nation' terms.

Access the UK Government’s up-to-date list of the continuity trade agreements already secured

Signed trade agreements, not fully in effect

There are some trade agreements the UK has signed which are partially applied or have not fully taken effect yet.

  • Albania - expected to enter into effect in early 2021. Trade takes place under WTO terms.
  • Canada - expected to enter into effect in early 2021. Preferential tariff rates are being applied.
  • Jordan - Expected to enter into effect in early 2021. Trade takes place under the Generalised Scheme of Preferences for imports and under WTO terms for UK exports.
  • Mexico - Expected to enter into effect in early 2021. Preferential tariff rates are being applied.

These agreements do not necessarily provide the same levels of coverage that Scottish businesses have benefited from as EU members. Businesses should consult UK Government guidance for further information on UK trade arrangements with non-EU countries.

Significant areas of divergence exist for the following agreements (this list is not exhaustive):

  • Norway and Iceland: this agreement covers trade in goods - including provisions on preferential tariffs, tariff rate quotas, rules of origin and customs and trade facilitation. Due to interdependencies with EU laws and systems, the services and investment provisions of the existing EEA Agreement have not been transitioned. This means the agreement does not cover trade in services and investment. Find out more from the Government's summary of the agreement.
    Canada: While an FTA has been signed, it has not yet been approved by the Canadian and UK Parliaments. Until this point, UK and Canada have agreed transitional measures to maintain the flow of goods. This agreement covers tariff-free trade, access to Tariff Rate Quotas and arrangements around Rules of Origin. Arrangements to maintain shared recognition rules on compliance of good manufacturing practices (GMP) and mutual acceptance of the results of conformity assessment for certain products are being finalised. Find out more from the Government's summary of the agreement.

Countries with no continuity agreement

There are still a number of countries with which the UK has not signed continuity agreements:

  • Algeria - Generalised Scheme of Preferences for imports. UK exports will be subject to Algerian national legislation.
  • Ghana - Agreement expected to be completed shortly. Generalised Scheme of Preferences for imports and under WTO terms for UK exports.
  • Bosnia and Herzegovina - WTO terms for imports. UK exports will be subject to Bosnia and Herzegovina national legislation.
  • Montenegro - Trade takes place under WTO terms
  • Serbia - WTO terms for imports. UK exports will be subject to Serbian national legislation

Types of trade agreements

Free trade agreement

A Free Trade Agreement is an agreement between two or more parties intended to reduce (or eliminate) tariffs, quotas and other trade restrictions.

Where there is no such trade agreement, then trade is on the basis of World Trade Organisation (WTO) Most Favoured Nation tariff schedules. Losing the preferential tariff rates in a trade agreement could lead to increased duties on exports from and imports to the UK, incurring costs for exporters; increasing the price of imported products for consumers and potentially leading to a reduction in the choice of products available.

In addition to the programme of continuity free trade agreements discussed above, the UK has also launched negotiations on new free trade agreements (FTAs) with the USA, Australia, and New Zealand. The EU does not currently have agreements with these countries. The UK has also recently signed a new trade agreement with Japan, which builds on the existing EU/Japan agreement.

Mutual recognition agreement

A mutual recognition agreement (MRA) is one in which countries recognise one another’s conformity assessments. When conformity assessments are applied to products, they are tested to an established performance standard. Inspections, quality management, surveillance, accreditation and declarations of conformity also take place.

The UK has signed MRAs with:

  • Australia
  • New Zealand
  • United States of America

Access an up to date list of the MRAs signed by the UK.

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