This month the leaders of the G7 met in Cornwall. During talks Prime Minister Boris Johnson agreed a trade deal in principle with Australia’s Prime Minister, Scott Morrison. If the trade deal is implemented, it will be the first deal agreed post EU Exit that isn’t a rollover of an existing agreement.
While trade with Australia only represents 1.2% of the UK’s total, the new deal could allow the UK to eventually join a wider Asia Pacific free-trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
However, there is a long way to go before the signing and implementation of a free trade deal. Furthermore, groups such as the National Farmers Union and UK Trade and Business Commission have expressed concerns about the deal. The NFU are concerned about the effect it could have on UK farmers and the Commission argue that the deal hasn’t been properly seen or examined by parliament.
Given the deal would only account for a small proportion of UK trade, businesses are probably keener to see tensions with the European Union resolved.
On Wednesday 16 June, at the Northern Ireland Affairs Committee, Lord Frost confirmed that the UK Government had requested an extension to the grace period for meat products, stating that they would consider all options if the EU did not agree. Reports later suggested that Lord Frost and European Commission Vice President Maroš Šefčovič would meet to discuss the request but there have been no substantive developments so far.
The government’s request followed the eighth meeting of the Withdrawal Agreement Joint Committee where discussion focused on the ongoing issues relating to the implementation of the Northern Ireland Protocol.
Lord Frost described the meeting as having no breakthroughs but no breakdowns. Some progress was made on Protocol-related issues, including the supply of medicines, movement of guide dogs to Northern Ireland from Great Britain and VAT on second-hand vehicles.
However, this progress can’t mask the impact that EU Exit disruption has had on businesses. The BCC’s Monthly Economic Review for June showed that UK exports of goods to the EU fell by 18% in Q1 2021, while exports of goods to non-EU countries rose by 0.9%.
With the ongoing Covid-19 pandemic and recession, the ONS have said it is too early to assess the extent to which this reflects short-term trade disruption or longer-term supply chain adjustments.
Trade data from April showed that monthly goods imports from non-EU countries were the highest since records began in January 1997, surpassing imports from the EU.
In the Chamber’s recent Quarterly Economic Survey, in partnership with Bishop Fleming, we asked a series of questions about how businesses have found importing and exporting with the EU since January and what their future trading plans look like with the EU and the rest of the world.
The report will be launched at a Zoom event at 8.30-9.30am on Thursday 22 July. To book your place, click here.