04/01/2021

Changes to UK trade following the end of the transition period

UPDATED ON 30th DECEMBER 2020
 
The UK-EU Trade and Cooperation Agreement
 
  • On 24 December, the UK and the EU agreed a new Trade and Cooperation Agreement.  This includes a free trade agreement, which means that from 1 January 2021 UK-EU trade will continue to be based on zero tariffs and zero quotas.  The deal is good news for businesses across the UK.
  • The deal takes the UK out of the EU’s customs union and single market.  This means businesses should continue their preparations to be outside the single market and the customs union next year.
  • With Brexit completed, the UK now looks forward to taking full advantage of the opportunities available to us as an independent trading nation, striking trade deals with other partners around the world.
Exporting from China to the UK
 
  • From 1 January, the UK will apply a UK-specific tariff (the UK Global Tariff, UKGT) to imported goods from any country in the world with which the UK does not have a bilateral trade agreement, including China.  This will replace the EU’s Common External Tariff, which applies until 31 December.  The new tariff regime is tailored to the UK economy, and reflects the UK’s free trade ambitions.
  • The new UKGT is good news for Chinese exporters to the UK. It is a simpler, easier to use and lower tariff regime than the EU’s Common External Tariff.  The UKGT almost doubles the number of products that are tariff free relative to what is currently applied – with just under 50% of products with zero tariffs under the UKGT compared to 27% in the EU’s Common External Tariff.  Where tariffs have been kept, the UKGT reduces and simplifies tariffs on over 3,500 products.  Guidance on the UKGT can be found here.
  • Wider guidance on trading with the UK as an external exporter can be found here.
Trade between the UK and the EU (of interest to Chinese companies with a UK presence and supply chains/customers in the EU)
 
  • The UK-EU Trade and Cooperation means that trade between the UK and EU will continued to be based on zero tariffs and zero quotas.  We have also agreed measures to facilitate legitimate trade with the EU, reducing administration and costs. 
  • Nevertheless, there will be changes at the border for moving goods between GB and the EU from 1 January, and businesses should continue to prepare for this:
    • Guidance on preparing to import goods from the EU to Great Britain from 1 January 2021 can be found here.
    • Guidance on preparing to export goods from Great Britain to the EU from 1 January 2021 can be found here
    • Guidance on moving goods into, out of, or through Northern Ireland from 1 January 2021 can be found here.
    • Guidance on the implications for UK nationals visiting the EU from 1 January 2021 can be found here.
Trade between the UK and other countries inc EEA countries (of interest to Chinese companies with a UK presence and supply chains/customers in other countries)
 
  • EU trade agreements will no longer apply to the UK once the transition period ends on the 31 December.  From 1 January, preferential market access between the UK and partner countries will be provided for by bilateral trade agreements which the UK has signed with partner countries. Businesses can access a list of a UK bilateral trade agreements which have been signed on gov.uk. 
  • Where no preferential agreement exists at the end of the transition period, trade will be conducted under a new Most Favoured Nation (MFN) tariff regime which is called the UK Global Tariff (UKGT). Guidance on the UKGT can be found here.  There are some exceptions if the goods are in scope for relief or tariff suspension, or if the goods come from countries that are part of the UK’s Generalised Scheme of Preferences (GSP).
  • Further guidance on exporting from the UK to the rest of the world after 31 December can be found here.
Contacts points for further enquiries
 
  • If it relates to your business based in the UK, click here.
  • If it relates to your business based in the rest of the world, including China, click here.

 

04/01/2021