On 27th April, the European Parliament voted to ratify the Trade and Cooperation Agreement (TCA) concluded between the European Commission and the United Kingdom in December last year. The TCA formally came into force on 1st May, cementing the new basis for trade between the UK and the EU.
It was entirely foreseeable that the UK’s exit from the bloc would lead to some level of disruption. Such, indeed, proved true; there was a £5.7 billion decline in export trade with the EU in January, after the transition period came to an end.
However, figures released last week by the Office for National Statistics (ONS) show that trade with the EU has recovered strongly. Exports to the EU rose by 8.6 per cent in March to £12.7 billion, close to the £13.6 billion recorded in December. An ONS statistician observed that businesses have become used to the new post-Brexit requirements of trade documentation and additional paperwork.
The concluded TCA forms a sound basis for continued bilateral trade with the EU, providing for zero tariffs and zero quotas on goods. There are certainly some elements of the new arrangements that continue to cause difficulties, notably the Northern Ireland Protocol of the Withdrawal Agreement, which is is the subject of continuing discussions. However, what has otherwise been achieved is something close to the free trade agreement that was the original UK negotiating position.
The vision of “global Britain” also appears to be moving closer to achievement. The recent ONS figures show that, for the first time since records began in 1997, UK imports from the rest of the world outstripped those from the EU.
This is likely a straw in the wind for what is to come. One of the principal opportunities of Brexit is the ability to develop our own regulatory policy, more in tune with our own priorities than the one-size-fits-all arrangements decreed by Brussels, which frequently seems more interested in pursuing protectionism than the free trade that has historically promoted the growth of global wealth.
The UK is currently negotiating with Australia a new free trade agreement, which is expected to be concluded in the course of the next few days. That FTA should pave the way for British accession to the inelegantly-titled Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Membership of the CPTPP, which comprises 11 of the most dynamic economies in the world, including Australia, Canada, New Zealand, Japan, Singapore and Mexico, would offer immense opportunities for UK businesses. For example, whisky exporters would see the disappearance of 165 per cent tariffs in Malaysia. Tariff-free access for UK-manufactured cars to the lucrative Canadian market would also be accelerated.
While assured access for British goods to the EU single market via the TCA is hugely welcome – and the EU will continue to be a highly important market for the UK – we are now beginning to see the wider commercial benefits of Brexit, which must surely be equally good news.