An update from UKFT on international trade arrangements with the EU, Australia, New Zealand, Turkey, the USA and Japan.
UK-EU Free Trade Agreement (FTA) Negotiations – Update
Negotiations between the UK and the EU have continued despite the current situation. The third round of meetings has just taken place with a further set expected in June. The meetings have been constructive but have yet to start to explore detailed issues. It is very likely that there will be a high level political meeting in late June to unlock the next round of discussions. Neither side is expected to ask for an extension to the transition period. Therefore, the possibility of leaving the EU’s Customs Union on 31st December 2020 without a deal is still a very real possibility.
FTA negotiations with Australia and New Zealand and Turkey to start next month
The government has said that initial discussions on FTA’s with Australia and New Zealand and Turkey will start by the middle of June. The start of talks with Turkey is especially important for the clothing and textile sector as Turkey provides close to £2 billion of duty free fashion and textiles to the UK every year. UKFT has been lobbying the government over the importance of maintaining duty free access to Turkey since 2016 and will ensure the sectors demands are regularly fed into the UK’s negotiating team.
UK-USA FTA discussions
Official discussions with the USA on an FTA also started in May. The USA is a market where high tariffs, difficult import procedures and a fragmented market with a variety of differing rules and regulations means that a UK-USA FTA could bring significant benefits to UK exporters. However, negotiations are expected to take a considerable time and differences over rules of origin for fashion and textile products is expected to be a particular source of contention. UKFT raised the importance of the US as a market for UK fashion and textile companies when we appeared as a witness to the House of Commons Select Committee on International Trade at the start of the month.
Government to announce new UK Common External Tariff Regime
Following a consultation earlier in the year, the government is set to publish the new UK external tariff regime next month. The tariff regime will apply to all goods coming into the UK from countries where we do not have trade agreements. UKFT submitted very detailed information to the government on the proposed regime including the absolute need for the new tariff schedule to provide support to UK manufactures. Details on the tariff regime will be published by UKFT as soon as they become available.
UK-Japan Free Trade Agreement: The UK’s Strategic Approach
Japan is the UK’s third most important market for fashion and textiles and UKFT has been actively and consistently lobbying the government to deliver an FTA with Japan as soon as possible. We therefore welcome the government’s commitment to an ambitious free trade agreement between the UK and Japan.
The UK government will begin negotiations on a UK-Japan free trade deal next week. In advance of the negotiations the UK government has published its Strategic Approach to the Negotiations.