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BREXIT SAVES US BILLIONS IN EU FEES AND MEMBERSHIP COSTS

Summary:

The UK previously had access to around 43 active trade deals as part of EU membership – a membership that, as one of the largest net contributors it paid billions each year for. The UK has replicated all but 3 of these (Bosnia, Montenegro, Algeria)


Explanation:

EU membership requires the delegation of a number of sovereign powers, one of which is the ability to negotiate international trade agreements. Being in a Customs Union requires centralised control of trade policy, as all members must control border crossings of goods in the exact same way, charging the same tariffs for the Customs Union to work.

The UKs membership of the EU Customs Union (EUCU) was as a member of the EU, and so when the UK left the EU, it also left the EUCU as a necessary byproduct.

At the point of leaving the EU in 2020, there were 45 FTAs/RTAs recognised by the WTO as having been notified to them as being agreed and in place. Of those 45, 43 were seen to still be active / not suspended by one of the parties to the agreement.

The UK instigated a process of trade continuity, which involved discussions with the signatories of all EU trade agreements, to attempt to secure continuity of those same trade agreements on the same terms, but with just the UK.

It is worth noting that, as the UK was still considered an EU member until the point at which its membership legally came to an end, it was not legally possible for the UK to conduct any trade negotiations or agree any terms different to those agreed centrally by the EU. This meant that it was not possible for the UK to negotiate any different terms with those countries, until after the departure was complete.

At the time of writing this, the only EU FTAs that had not been either replicated or replaced were those with Bosnia, Montenegro and Algeria—this means that the UK was able to take advantage of the same trade deals on the same terms, but without the membership cost for being within the EU.


Reference: https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx 

Reference: https://www.gov.uk/government/collections/the-uks-trade-agreements 

 


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