Trade Deals Around the World: November 2020 Edition
Trade Deals Around the World is our monthly recurring update, which gives you a quick and easy overview of what has been happening in the many trade deal negotiations going on around the world.
A quick round-up of news on trade deals for the past month.
The United Kingdom and Ukraine
While the United Kingdom is still negotiating with the European Union on the Brexit Deal, it has signed another free trade agreement. The first one was with Japan, which we wrote about in last month’s edition.
The trade element of the new UK-Ukraine Agreement envisages preferential treatment on a range of goods and services. It is based on the 2014 EU-Ukraine Association Agreement. Around 98% of Ukrainian goods will now receive greater access to the UK market, with tariff quotas maintained in most cases.
The deal offers a range of advantages for post-Brexit Britain. Crucially, freer trade with Ukraine will make a significant contribution to the UK’s food security. Britain is a major food importer and the new agreement means British consumers will benefit from a wider variety of affordable, high-quality Ukrainian products.
Read more here.
The United Kingdom and Colombia
Columbia and the United Kingdom are keeping things as is. Fresh Plaza reports:
The Colombian House of Representatives approved the Trade Agreement between Colombia and the United Kingdom, which was signed in May 2019 before the UK left the European Union.
This agreement guarantees that the United Kingdom will maintain the same tariff preferences that the Colombian products have had to enter that market since 2013 under the Free Trade Agreement with the European Union.
The press release from the British Government states:
Trade between the UK and Ukraine was worth £1.5 billion in 2019. Top UK goods exports to Ukraine were aircraft (£79m), medicinal and pharmaceutical products (£61m) and cars (£52m). The UK imported £177 million of cereals and £182 million of iron and steel in 2019.
This agreement is designed to take effect when the EU-Ukraine agreement ceases to apply to the UK at the end of the transition period. The agreement will be subject to the domestic parliamentary procedures in both the UK and Ukraine before it is brought into force.
The UK has now signed or agreed in principle trade agreements with 50 countries. This includes the UK-Japan Comprehensive Economic Partnership Agreement which was agreed in principle on 11 September 2020. Total UK trade with these countries was worth £144 billion in 2019.
Please find the full press release here.
China and the United States
China and the United States agreed on a first phase trade agreement earlier this year. China is still behind on the imports from the United States
The Department of Agriculture late last week announced China has followed through on 71 percent of its Phase One Economic and trade agreement commitments.
USDA and the U.S. Trade Representative’s Office says that China has purchased over $23 billion in agricultural products to date.
Outstanding sales of U.S. corn to China are at an all-time high of 8.7 million tons, and U.S. soybeans sales for the marketing year 2021 are off to the strongest start in history.
Read more here.
China and Cambodja
China’s commerce ministry said on Monday it has signed a free trade agreement with Cambodia to promote further development of bilateral economic and trade relations.
The agreement covers a wide range of sectors including trade, tourism and agriculture, under which both countries will offer tariff cuts for each other’s products, the ministry said in a statement on its website.
Please find the original story here.
The European Union and Mercosur
Things are still not well between the European Union and Mercosur.
...the European Parliament symbolically rejected the European Union-Mercosur free-trade agreement due to what several parliamentarians have called “deep concern about the environmental policy of Jair Bolsonaro.”
In an unprecedented move, Parliament’s plenary approved an amendment in a report on the application of European trade policy, emphasizing that the “EU-Mercosur agreement cannot be ratified in its current form.”
This amendment received 345 votes in favor, 295 against, and 56 abstentions. It is highly symbolic and not mandatory, but it reflects the extremely difficult environment to implement the bi-regional agreement which has been negotiated over the past 20 years.
Read the full story here.
Norway and China
Norway and China are trying to come to a trade deal, after negotiations were paused when the Nobel Prize was awarded to a Chines dissident in 2010.
While relations between Norway and China have thawed, lately, Norway appears eager to do more to finally get the free trade deal done, with Chinese construction companies winning or in the running for big-ticket construction deals in the high-value Norwegian market…
Read more in this article on Seafoods.com.The article also discusses other deals China is working on. For example with Pakistan and Iran.
Trade Agreements Are a Powerful Piece in the Geopolitical Chess Game
An interesting read in the San Diego UnionTribune about how trade agreements sometimes are used for geopolitical reasons.
Trade agreements can be as powerful as military force for achieving a country’s strategic objectives. An example of this was a trade agreement orchestrated by the United States in 2016 that Secretary of Defense Ash Carter said was “as important to me as another aircraft carrier.” He did not have to add that the agreement would help check an aggressive China.
Read the full story here.