The new agreement marks the end to the transitional period, which lasted until the end of 2020. We no longer have access to the single market (SM), and we are no longer a member of the EU customs union (CU). UK businesses may not have even known what the SM and CU were, or meant, but ending our former access to them means, for anyone trading with the EU, a huge shift in the way that we do business with any country that’s a member of the EU (there are 27 of them for those who may not know this already).
UK businesses are sometimes still asking what the CU and SM are, still finding out which countries are, or are not in the EU, and many still have a steep learning curve ahead of them to transition from working in a union that made trade as easy as living in Grantham and doing business in Glasgow.
So, back to the question – what does the trade agreement mean for UK employers? The best starting point is to assume that nothing is the same and work up (or down) from there. Assume that you’re trading in South Africa, not Slovenia, or Vietnam and not Vienna, and think about all the things that you would have to if you had customers in another hemisphere.
Whilst the trade agreement (TA) sets out a baseline for how UK businesses can trade in the biggest market in Europe, don’t assume that this provides any guarantees. The TA is littered with exemptions and restrictions – in part due, perhaps, to the speed with which the agreement was put together and the fact that the UK wanted to bring back control of its laws and regulations, and that the EU wanted to protect/restrict access to its market.
The practical answer is check, re-check and double check. Check to see what industrial sector you are operating in (which means looking up an international WTO code) – and remember that UK businesses may have operations that span a few different codes. Then re-check the trade agreement for the codes (the agreement chops up businesses by code, so without it you won’t get very far understanding it), then double-check the agreement to find out how each of the 27-member states have the right to impose its own national rules and regulations. These will be provisions under each code.
And then it’s plain sailing – apart from the fact that by the time you have done all this, you’ve got the overall picture – don’t assume that anything is the same as it was before, and approach EU trade as you would/should trade with any other country that you know nothing about.
At the end of this blog are some useful links to the trade agreement and the codes, but also to us, the IEMC. And if you get stuck or prefer not to spend the remainder of your coronavirus lockdown pouring over the trade agreement and international trade codes, get in touch and find out how we can help.
How we can help
Our EU business consultants can advise you, reviewing your existing contracts, helping you make changes, and how you can operate within the new UK/EU TCA and UK immigration rules. Get in touch with us at office@iemconsultancy.org
Useful links -
Author: IEMC 02/21
Need further support?
Email GMCC Trade team at exportbritain@gmchamber.co.uk