Yahoo Finance Brexit trade deals: Where does the UK stand with countries around the world?
British ministers are on a global tour pressing the case for the UK post-Brexit.
Trade secretary Liam Fox is in the US as a row has broken out about lowering food standards that could see chlorinated chicken from America to be sold in the UK.
Meanwhile, Boris Johnson has been ruffling feathers in New Zealand, likening the traditional Maori greeting – the hongi – to a headbutt.
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Under EU rules, nothing can be officially discussed or signed on trade agreements until the UK has left the bloc. However, informal talks are ongoing with a number of trading nations. So where do we currently stand?
The United States – current trade about £167bn a year
Liam Fox has been on a two-day trip to the US in an attempt to accelerate a new trading arrangement. President Donald Trump has said: “We will do a very big deal, a very powerful deal. Trade will be a big factor between our two countries.”
Fox contends a new deal could be worth an additional £40bn to the two nations in the decade after Brexit – if various barriers can be removed. He met with US Trade Representative Robert Lighthizer on Monday.
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But, a deal while politically attractive, could put British companies at risk of hostile takeovers, Adam Marshall, the head of the British Chambers of Commerce, warned over the weekend.
The Observer, he said: “There is a huge risk that UK-based firms will continue to face higher upfront costs and regulatory requirements after any agreement, leaving them at an instant disadvantage to US competitors that would suddenly have wider scope to compete in and buy up chunks of the UK market.”So where does the UK stand with its global partners at present?
China – current trade about £54bn
Theresa May talked earlier this year of reviving the “golden age” of trade between the UK and China.
The £18bn Hinkley Point nuclear plant is a prime example of the kind of investment from China that Britain would seek post-Brexit.
In May, on a visit to Beijing, Chancellor Philip Hammond said Britain was a “natural partner” for China. He said: “Our ambition is for more trade, not less trade, and China clearly shares this ambition.”
Hammond spoke of the $26trn infrastructure programme needed in Asia – $4trn of which China had pledged to help fund. “I believe, [the UK] can be a natural partner in delivering this infrastructure by supporting the finance, the design and the delivery needed to make the vision a reality,” he said.
India – current trade about £15bn
Britain currently faces significant tariffs on its exports to India because the EU has no trade deal in place.
Therefore, the chance to clinch favourable terms for UK plc with a £1.3bn-strong market is a high priority.
A report in May from the Commonwealth suggested removing the red tape will see the value of British exports to India rise from £4.2bn to £6.3bn, an increase of £2.1bn, or 33%.
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The report suggests there is significant potential for the growth in the export of pearls and precious stones from the UK to India, cars and car parts and alcohol. It says that the that some of the biggest increases in trade are for whisky and gin.
However, while there is a “great enthusiasm” for a free trade deal, India’s finance minister Arun Jaitley said any talks would have to run “in parallel” with current Indian negotiations with the EU.
Those talks began in 2007 – an indication perhaps of how long Britain may be off securing terms with India.
Australia – current trade about £15bn
Australia (and Canada) has urged the UK to join “ready made” trading blocs around the world to smooth business and commerce post-Brexit.
The Trans-Pacific Partnership – a deal that includes Australia and Japan – was in jeopardy after Trump withdrew the US.
However, the remaining partners have indicated they want to forge ahead. Malcolm Turnbull, Australia’s PM, told Mrs May during a visit to the UK earlier this month that “we do not muck around” when it comes to free trade.
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But, he also warned that he wanted to clinch a deal with the EU before setting sights on getting something signed with the UK.
Similarly, joining Nafta – the group made up of Canada, Mexico and the US – could be a ready-made solution to tricky and long negotiations, as long as the UK is happy to sign up to the deal that already exists.
New Zealand – current trade about £2.3bn
Boris Johnson is on a two-day trip to New Zealand and Australia as part of the UK’s broader efforts to expand its global reach before Brexit.
While not a huge trading partner, Johnson said the nation “is at or near the very front of the queue” when it came to a deal.
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NZ prime minister Bill English said: “If the UK needs to be able to establish early its ability to do free trade agreements, then New Zealand is a candidate for that.”
As with Australia, the rights of New Zealanders – as part of the Commonwealth – to live and work in the UK post-Brexit will be a key part of any talks.
Middle East – current trade in excess of $37bn
Theresa May has already indicated that securing a deal with the likes of Qatar, UAE, Saudi Arabia, Kuwait and others in the Middle East is a priority.
Qatar has said it intends to invest £5bn in Britain over the next five years, and Mrs May has also held trade talks with Jordan and Saudi Arabia. The UK government has pledged $5.6bn to help British businesses exporting to Qatar through UK Export Finance, the export credit agency.
According to Links Group, which helps foreign companies operate in the U.A.E. and Qatar, a potential UK-Gulf Cooperation Council free trade deal could help economic diversification in the UAE.
John Martin St.Valery, CEO of Links Group, said the UAE and the UK were aiming to double reciprocal trade to £25 billion by 2020.
Liam Fox has paid visits to Qatar, Kuwait, Oman, United Arab Emirates and Bahrain.
