Existing UK trade agreements with non-EU countries

As an EU member, the UK has benefited from around 40 free trade agreements which the EU has signed with other countries, including Canada; South Korea; Mexico; and the EEA EFTA countries (Norway and Iceland).

At the end of the transition period on 31 December 2020, the UK will not only cease to be part of the EU Single Market and Customs Union, it will also lose access to the preferential trading terms offered by these agreements.

The UK Government has been negotiating to “roll over” these existing EU trade agreements and secure continuity of trading arrangements for Scottish businesses. Without these continuity deals, on 1 January 2021 trade with those countries will revert to WTO Most-Favoured Nation terms.

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

There are still a number of countries with which the UK has not signed continuity agreements. Preferential arrangements which will not be in place on January 1st include:

  • Albania
  • Ghana
  • Algeria (trade expected to take place under WTOterms - Generalised Scheme of Preferences for imports)
  • Bosnia & Herzegovina (trade expected to take place under WTO terms)
  • Montenegro (trade expected to take place under WTOterms
  • Serbia (trade expected to take place under WTOterms)

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.
  • 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. The final arrangements will be published here
Types of Trade Agreement

Free trade agreements

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 agreements 

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. 

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