On April 27, 2021, the European Parliament ratified the EU-UK Trade and Cooperation Agreement (TCA), almost four months after its provisional application. Although the United Kingdom left the European Union in January 2020, the terms of the transition period meant that the trading relationship between the two parties remained largely unaltered throughout 2020. This changed in January 2021, when the TCA provisionally came into force, and the United Kingdom ceased to be a member of both the Single Market and the Customs Union. As a result of this sudden change in the UK’s trading relationship, the value of goods exported to the European Union fell by approximately 5.3 billion British pounds, while imports fell by 7.2 billion pounds. This dramatic fall in trade was also likely exacerbated by the fact that the terms of the TCA were still being negotiated a week before it came into force, leaving businesses on both sides of the channel little time to adapt to changes. In March 2021, almost 40 percent of British exporters were still experiencing additional paperwork, and 15.2 percent disruption at UK borders.
EU still dominates UK trade
As of 2020, the European Single Market remains the UK’s main trading partner accounting for 51.6 percent of all UK imports and 53 percent of its exports. One of the main argument of those advocating Brexit, was that Britain should change it’s trading patterns and increase its volume of trade with the rest of the world, due to the EU’s declining share of global GDP. Increasing trade with the United States, and scaling up trade with fast growing Asian economies and Commonwealth members may well benefit the UK, but it remains to be seen if it will be a sufficient replacement to its previous access to the European Single Market. In the short-term at least, one of the main consequences of Brexit will be the impact it will have on food trade. According to the most recent figures, more than a quarter of food consumer in the UK comes from the EU. In particular, the UK is reliant on the EU for fruit and vegetables, with meat also being one of the main food commodities imported from the bloc.
The main issues
The fact that trade negotiations between the two entities went down to the eleventh hour in late 2020 was due to a series of sticking points that proved difficult to resolve. One of the these was that of fishing rights, and in particular access to territorial waters. This was made more difficult by the fact that most of the fish caught by UK vessels is not typically consumed by UK customers, and is instead exported to the EU. Another issue that went down to the wire was that of the level-playing field, and the alignment of rules on labor laws and state aid, with the EU fearing that the UK sought an unfair advantage for it’s businesses over EU ones. Finally, one of the most serious issues was that of the UK’s only land border with the EU, between Northern Ireland and the Republic of Ireland. Through the Northern Ireland protocol, both the UK and EU agreed to protect the Good Friday agreement, and keep the land border between Northern Ireland and the the Republic of Ireland open. In order to do this, certain goods entering Northern Ireland from Great Britain are subject to checks, creating a regulatory border in the Irish Sea. This arrangement has being heavily criticized by Unionist politicians in Northern Ireland however, and has already damaged political stability in the region.
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