Member Article

Brexit expert tells C&W audience that Free Trade Agreements will be challenging

One of the leading international business experts on Brexit has told an audience in Coventry and Warwickshire that signing new free trade agreements will be ‘more challenging’ than expected.

Anastassia Beliakova is the head of trade policy at the British Chambers of Commerce and was presenting to the Coventry and Warwickshire Chamber of Commerce’s latest Brexit Club meeting.

The club, which was set up in the days after the EU Referendum vote, has been looking at the range of issues that will affect companies once the UK leaves the European Union.

The event, held at the Ramada Hotel in Coventry, focussed on signing free trade agreements with other nations or trading blocs and what the practical implications would be for businesses involved in import and export.

Anastassia said that many companies who trade overseas don’t take full advantage of the agreements already in place via the EU and that signing new deals would be complex.

She said: “Through the current free trade arrangements that have been negotiated via the EU, we have free trade access to 72 countries and that has led to massive trade gain with markets such as Mexico, Chile, South Korea and Serbia.

“But not all companies take advantage of the free trade terms as 30 per cent of businesses that could qualify for lower tariffs are not using them.

“Through the current transition arrangements for Brexit, there will be no change to our access to those free trade agreements until 2021. During the transition period, the UK will be free to sign new trade deals but will only be able to implement them after the transition period ends.

“It is clear, however, that agreeing and signing new free trade agreements is going to be more challenging than originally thought.

“Currently, products that have components made in different parts of the EU are considered to be from the same place under the rules of origin when they are being sold abroad via free trade agreements.

“However, once the UK leaves the EU that will not be the case and we are pressing Government to find a way round this issue.

“One of the aspirations of Brexit was to have an independent free trade policy but a trade deal with the USA, for example, is not something to be taken lightly and could have significant, unintended impacts.

“It’s going to take a lot of work and the Government is still building up its knowledge, capacity and savvy in these areas to allow the UK to pursue its ambitions after Brexit.”

David Hooper is a director of Hooper & Co and has worked in international trade and economic development for more than 20 years.

He guided firms through the practical steps of making the most of existing free trade agreements but said they should not dominate a firm’s plan to trade overseas.

David said: “When it comes to making use of free trade agreements, the origin of the product is key. You can’t import a toaster from China, put it in a shiny new box and then sell it into a country using a free trade agreement. The product must either be made or have significant value added to it in one place.

“There are advantages of free trade agreements but they are not for every business and should only form a small part of a company’s export strategy.

“What all of this should do is encourage businesses to review their supply chain and make sure that they have robust evidence for where all of the components in their products are made.

“We are already seeing some UK companies opening facilities in the EU in order to get round the rules of origin once Brexit happens.

“On the flipside, some EU businesses are opening in the UK because this market is particularly important to them but that’s not happening to the same level as far as I have seen.”

Businesses looking for information or support regarding this or any other Brexit issues can contact the Chamber of Commerce on info@cw-chamber.co.uk.

This was posted in Bdaily's Members' News section by Matt Joyce .