As a European Union member, the UK is automatically part of about 40 trade agreements which the EU has with more than 70 countries.
If the UK leaves the EU without a deal on 29 March, it would lose these trade deals immediately.
To avoid this, the UK government says it wants to replicate the EU’s trade agreements “as far as possible” and have them ready to go in the event of a no-deal Brexit.
Liam Fox, the international trade secretary, told MPs in January last year that the government wanted to achieve “continuity and stability” by ensuring that the UK would continue to benefit from these arrangements.
So how much progress has been made?
Four out of 40
The UK has (so far) only agreed four deals. Labour’s Shadow International Trade Secretary, Barry Gardiner, said he understood that talks on 19 other deals were “significantly off track” and that “two are not even being negotiated”.
In response, Mr Fox said talks to replicate the remaining agreements will “go down to the wire”.
The 40 deals which the UK is already part of (through its EU membership) are designed to make trade easier between the EU and the rest of the world. Such arrangements include relaxing certain rules, reducing taxes (tariffs) on imports and exports, or granting easier market access.
The government estimates that about 11% of UK trade relies on the EU’s agreements with 70 countries.
The agreements the UK has struck are:
- Switzerland (signed 11 February)
- The Faroe Islands (1 February)
- Eastern and Southern Africa (31 January)
- Chile (30 January)
Switzerland is the latest to be signed. The Department for International Trade says that trade between the UK and Switzerland was worth £32.1bn in 2017.
Under the UK-Switzerland agreement, which was confirmed in Bern on 11 February, tariffs (taxes on goods) will continue to be avoided on the vast majority of goods traded between the two countries.
Without the deal, the UK government says the British motor industry could have faced up to £8m in tariff charges, while aluminium exporters could have faced up to £4m.
An additional agreement was also signed in Bern by Liechtenstein’s Minister for Foreign Affairs, Aurelia Frick. It applies the main parts of the Swiss-UK trade deal to her country too.
The Faroe Islands
The Faroe Islands is the UK’s 114th largest trading partner, according to the government. Total trade between the two countries was worth £236m in 2017.
Fish and crustaceans made up the vast majority of UK’s imports from the Faroes in 2017, worth £201.7m, while total UK exports to the country were worth only £6m – mostly machinery and mechanical appliances.
The UK government says that the agreement it has reached will mean consumers continue to benefit from greater choice and lower fish prices “such as Atlantic salmon, haddock and halibut”.
Eastern and Southern Africa and Chile
Trade between the Eastern and Southern Africa (ESA) region was worth £1.5bn in 2017 – about 0.1% of total UK trade. The UK-ESA deal covers Madagascar, Mauritius, Seychelles and Zimbabwe.
Meat and fish are the main goods imported from the region by the UK (£111m).
Signed at the end of January, the UK-Chile trade arrangement was the first to be done. Total trade between the UK and Chile was £1.8bn in 2017.
Fruit, nuts and drinks are the top goods imported by the UK. The government says the deal will help to protect parts of the UK’s wine industry.
The UK has also signed deals with Australia and New Zealand, but these are “mutual recognition agreements” and not free trade agreements.
The deal replicates all aspects of the current EU agreements when it comes to recognising product standards, such as the labelling and certifying of wine.
At the World Economic Forum in Davos, Liam Fox, the International Trade Secretary, announced on Twitter that the UK had “agreed in principle” a free trade agreement with Israel. A trade conference between the two countries will be held in London in the “coming months”, he added.
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But it may not be possible to roll over all of the 40 deals by 29 March, according to one government minister.
George Hollingbery, a minister in the International Trade Department, told MPs last month that some of the EU trade agreements would be “challenging”, adding that “one or two” would be “close to impossible” to get in place by the end of March.
Turkey was highlighted by Mr Hollingbery as one country where a deal would be very difficult to achieve, given it is in a customs union with the EU.
The current lack of signed trade agreements is not a surprise to Alan Winters, director of the UK Trade Policy Observatory at University of Sussex.
“You can’t simply roll over everything – these existing agreements will have references to EU law, so you cannot avoid some negotiation,” he says.
Some countries may also be apprehensive in signing deals right now, given that it is so unclear what Brexit will ultimately look like, adds Prof Winters.
So what could the consequences be if trade arrangements are not fully in place by 29 March and the UK leaves with no deal?
With the countries where the UK has no formal trade agreement, both would have to trade under the rules overseen by the World Trade Organization (WTO).
Trade would not stop if this were to happen but some barriers would go up, says Alex Stojanovic, from the Institute for Government think tank.
“There is a reason you have trade agreements, it’s that they give you better trade preferences than WTO terms.
“So some businesses will be harmed by tariffs coming into play,” he says.
Brexit: What trade deals has the UK done so far? – BBC News