The UK Government has said it is seeking to rollover the EU’s free and preferential trade agreements covering more than 70 non-EU countries. The EU currently has more than 1,000 international agreements with non-EU countries covering myriad regulatory and policy issues. It is not clear how many require action to ensure continuity in the UK’s relations with these countries post-Brexit.Jump to full report >>
The UK is currently party to numerous international agreements with third countries as a member of the EU. The EU’s Europa online Treaties database lists 1,256 international agreements that the EU is party to. How many of these are pertinent to the UK is as yet unclear.
A report in the Financial Times in May 2017 suggested that there were 759 separate EU international agreements with potential relevance to Britain. This included 295 agreements related to trade, as well as agreements related to regulatory co-operation, fisheries, agriculture, nuclear co-operation and transport co-operation (including aviation). The agreements cover 168 countries, with multiple accords with certain countries.
The International Trade Secretary Liam Fox has indicated that such high figures are misleading, and that not all of the treaties would require action to maintain continuity following Brexit. Some of these treaties have been superseded, are redundant or no longer relevant to the UK, and there are also multiple agreements that could be understood as one agreement.
Dr Fox said in December 2017 that work was “ongoing” to “identify the full range of agreements that are affected by exit and to take action to ensure continuity for businesses and individuals on exit.”
Around a quarter of the EU’s international agreements have been classified as mixed agreements because they cover competences shared by the EU and Member States. This means that they have been ratified separately by EU Member States as well as approved at EU level. While EU-only agreements will cease to apply to the UK once it leaves the EU, some legal experts have suggested that aspects of mixed agreements could continue to apply. However, the EU has stated that all agreements will cease to apply.
The Government has indicated that it is seeking the transitional adoption or “rollover” of all the EU’s trade agreements and other preferential trade arrangements with third countries. The Trade Bill has been introduced to help with this. This will enable current trade arrangements with third countries that the UK is currently party to through the EU to be replicated in UK-third country agreements when the UK leaves. This would not preclude a fuller revision of these agreements in the longer term to create a more bespoke trading arrangement.
There is less clarity however with regard to how the Government intends to address arrangements covered by the numerous EU international agreements on non-trade issues.
The Government’s Impact Assessment for the Trade Bill published in November 2017 referred to 88 third countries covered by EU trade agreements, accounting for 13% of UK trade. This figure did not take into account newly signed agreements such as the EU-Japan partnership.
The Government said in January 2018 that it had engaged with 70 countries covered by over 40 EU international trade agreements and had received a positive reaction in relation to its objective of ensuring continuity in these trading relationships.
A report from the International Trade Select Committee published in February 2018 however warned of trade with 70 nations “falling off a cliff edge” if the Government did not act quickly to roll over the EU’s trade deals. It also said there was an urgent need for clarity “over the number, type, scope, extent and importance of the EU's trade-related agreements.” It also warned that substantive amendments to the rolled-over agreements were almost certain to be required.
In December 2017, the EU’s chief Brexit negotiator Michel Barnier indicated that the EU’s trade deals with third countries would not apply to the UK during the envisaged transition/implementation period from March 2019 to December 2020 when the UK will remain bound by single market and custom union rules.
In February 2018 the Government published a Technical Note stating it would seek continued application of EU international trade and other related agreements during the transition/implementation phase by agreement of all the parties concerned (although this would apply only to the EU’s bilateral agreements, not its multilateral agreements).
Information on the Government’s preparations to replace or address arrangements covered by the numerous EU international agreements on non-trade issues has so far been lacking. However, the Technical Note did refer to EU agreements covering a wide range of other policy areas including nuclear cooperation and aviation, and said that action was required to clarify the application of these agreements during the implementation period.
At the March European Council, the EU agreed to notify other parties to international agreements that the UK is to be treated as a Member State during the transition period for the purposes of these agreements. However, this remains a request and it is possible that the third countries concerned may not agree.
The Government published a Technical Note in June 2018 indicating that it would seek the continued application to the UK of EU international trade agreements should the temporary ‘backstop’ customs arrangement be implemented to prevent a hard border appearing between Northern Ireland and the Republic of Ireland, in accordance with the UK-EU agreement of December 2017.
In evidence to the International Trade Select Committee in July 2018, Liam Fox said that agreements in principle had been reached with third countries in terms of continuing trading arrangements but that countries were waiting to see if there would be an implementation/transition period first, with a view to using the extra time to negotiate a more bespoke agreement rather than simply rolling over the existing arrangements.
Commons Briefing papers CBP-8370
Author: Stefano Fella