On Christmas Eve, the U.K. and the EU reached an eleventh hour trade agreement, after nine months and some 2,000 hours of painstaking discussions involving about 200 officials. The deal, called the EU-UK Trade and Cooperation Agreement, has since been approved by the ambassadors of the EU’s 27 member states and signed by Ursula von der Leyen, President of the European Commission, and Charles Michel, President of the European Council. On the British side, it was subsequently approved by the House of Commons and signed by Prime Minister Boris Johnson, whose father Stanley Johnson is reportedly planning now to ask for French citizenship in order to remain a citizen of the EU. The House of Lords, the upper house of the British parliament, still has to examine the agreement, while the European Parliament is expected to clear it by the end of February.
Officials of FESI, the European Federation of the Sporting Goods Industry, were unavailably for comment on the details of the 2,000-odd pages of the agreement. It will take time to examine all of them, raising the possibility of some discussions at the parliamentary level. As the federation defends the interests of companies all over Europe, the British sporting goods industry will continue to be represented at FESI through its trade association, the Federation of Sports & Play Associations (FSPA).
At the national level, some observers have noted that - while it is better than no deal at all - the new deal will inevitably cause additional paperwork and some initial disruption at border points, as companies have had little time to familiarize themselves with the procedures. The problem has been compounded by the bottlenecks that truckers found in the recent days in shipping products to the U.K. and coming back home. U.K. importers and foreign companies that have set up buffer warehouses in the U.K. to cope with the new situation hoarded plenty of products from the EU in the expectation of a possible “no deal,” which would have resulted in the imposition of duties. The discovery of a dangerous mutant of the Covid-19 virus in the U.K. led to the imposition of tests on the truck drivers before leaving the country.
In view of the mess and the lack of visibility and information on the terms of the agreement, Canyon Bicycles decided on Dec. 19 to stop deliveries on orders from the U.K. until Jan. 11. Other companies have probably acted in the same way.
While Boris Johnson has presented the pact as a big “zero tariff” agreement, there is also some suspicion that it will involve some import duties on products that are only assembled in the EU with materials and components sourced from other countries. Furthermore, financial and other services are excluded from the pact.
A few hours before its historic Christmas Eve agreement with EU, the U.K. signed the latest in a series of bilaterial free trade agreements (FTA) with Turkey, in order to secure existing preferential tariffs previously negotiated by the EU with that country. The accord with Turkey came on the heels of previous bilateral FTAs signed in the last few months with many other countries including Singapore, Japan and Vietnam, which may lead the U.K. to join soon the Transpacific Partnership with a number of Asian countries. It has also struck FTAs with Switzerland, Canada and a number of Latin American countries, among other countries.
The U.K. has been in a hurry to conclude FTAs since it formally left the EU on Jan, 31, 2020 with a transition period for its final exit from the European Single Market on Dec. 31, 2020. A list of the non-EU countries with which the U.K. has currently such an agreement in place can be found at https://www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries. Others are in the pipeline including a possible deal with the U.S., which may be more difficult to reach.
While the U.K. doesn’t have the same bargaining power as the EU, it has been keen on negotiating FTAs based on its own terms, as its interests are not the same as those of other European countries.
Photo: Aleks Marinkovic, Unsplash