The Department for International Trade (DIT) has released key figures relating to the continuity agreements it is trying to secure for existing trade agreements it has with non-EU countries through the European Union – including key agreements with South Korea and Canada. The UK has already secured continuity agreements with Switzerland and Chile.
The value of trade with so-called ‘Trade Agreement Continuity’ (TAC) markets was £139 billion in trade (goods and services) in 2018 – 11% of the UK’s total trade. The agreements already agreed account for 53% of all trade with TAC countries. DIT have said that once an agreement with South Korea is in place, this number will go up to 63%; this agreement was agreed in principle on 10 June 2019.
Taking South Korean trade into account, DIT reports that it has secured continuity for £88 billion of UK trade, going off 2018 figures.
TAC's represent a significant proportion of UK trade
Trade with TAC countries represented 10.7% of the recorded UK overall trade in 2018, with EU trade representing 49.4% and the rest of the world - i.e. markets with whom the UK has current trade agreement - 39.9%. The recorded 10.7% figure does not include trade with Turkey, San Marino and Andorra, who form a part of a customs union with the EU. It also doesn’t include Japan, whose ‘Economic Partnership Agreement’ with the EU only came into force in February 2019.
TAC trade, especially if trade with Japan were to be included, therefore represents a significant amount of trade for the UK.
Understanding how these trade agreements work
Trade agreements, such as those that the UK will continue to have with markets like Chile, Switzerland and South Korea, enable the reduction of tariffs on the imports of goods between into countries.
Our ‘Understanding Rules of Origin, Free Trade Agreements & Export Preference’ training course helps you to understand how you can use these agreements to trade to such markets, making the most of reduced or removed tariffs.