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What is the significance of trade partnership agreements in the context of Brexit?

Aracely Pires

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Brexit has undoubtedly caused a lot of uncertainty in trade relations between the United Kingdom (UK) and the European Union (EU). One of the main concerns is how to maintain the existing economic relations and how to build new trade partnerships that are mutually beneficial for both parties. In this context, the significance of trade partnership agreements cannot be overstated. In this article, we will explore the importance of trade partnerships agreements and their implications for both the UK and the EU.

Firstly, it is important to understand what trade partnership agreements are and how they work. Essentially, a trade partnership agreement is a bilateral agreement between two countries or groups of countries that outlines the terms and conditions of their trade. These agreements typically include provisions related to tariffs, customs procedures, intellectual property rights, services, and investments. The main purpose of these agreements is to facilitate trade and reduce barriers to entry, thereby promoting economic growth and prosperity.

In the context of Brexit, trade partnership agreements are particularly significant because they offer a way for the UK to maintain existing trade relationships with the EU and build new ones with other countries. Since leaving the EU, the UK is no longer bound by its trade agreements with other countries that were negotiated by the EU. Therefore, the UK must negotiate its own trade agreements with other countries to ensure that its exports are not subject to high tariffs and its businesses have access to foreign markets.

One example of a trade partnership agreement that the UK has recently negotiated is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This agreement, which includes 11 countries including Japan, Canada, and Australia, reduces tariff barriers and provides new opportunities for UK businesses in these markets. It is estimated that the CPTPP could boost UK exports by approximately £1.8 billion per year.

In addition to building new trade partnerships, the UK must also maintain its existing trade relationships with the EU. To this end, the UK and the EU signed a trade partnership agreement on December 24, 2020, which came into force on January 1, 2021. This agreement ensures that there are no tariffs or quotas on goods traded between the UK and the EU. However, it is important to note that the agreement does not cover trade in services, and some sectors such as financial services and data flows will require further negotiations.

In conclusion, trade partnership agreements are of significant importance in the context of Brexit, as they offer the UK a way to maintain existing trade relationships with the EU while also building new partnerships with other countries. These agreements are crucial for promoting economic growth and prosperity, and they offer opportunities for UK businesses to expand into new markets. As negotiations continue, it is essential that all parties work together in a constructive and collaborative manner to ensure that trade partnerships agreements are mutually beneficial and sustainable in the long term.