The release of the UKGT marked an important milestone. What's the impact on trade outside of trade agreements? And what's the status of UK trade agreements?
The release of the "UKGT" (UK Global Tariff) on May 19, 2020 had originally gone by fairly unnoticed due to Covid-19 developments and media focus at the time. Nevertheless, it marked an important milestone and came with a series of UK announcements. You can find the key facts, latest status of trade agreements, and relevant links here.
Official guidance: Tariffs on goods imported into the UK
The UK Global Tariff applies to all goods that are imported into the United Kingdom. As part of this, the UK government introduced its "Most Favoured Nation" (MFN) tariff policy effective January 1, 2021.
Tariff-rate quotas, or TRQs, allow a limited quantity of a product to be imported at zero or lower import duty rates than the normal tariff rate for that product. If the limits are exceeded, the higher duty rate applies. As part of the UKGT, these limits may be expressed in units of:
If TRCs apply to your products, you can request to import a limited amount at a lower duty rate. Note that some TRCs only apply when the goods are imported from certain countries. The UK government will make further advice available later this year in line with the UK goods schedule at the WTO (World Trade Organization).
The UKGT applies to goods imported into the UK from countries with which trade agreements are not in place. For the rest, terms of applicable UK agreements apply. Until the end of the Brexit Transition Period, UK trade was covered by existing EU trade agreements, but these no longer apply. For trade with the EU, a last-minute deal was negotiated and the EU-UK Trade and Cooperation Agreement took effect on January 1, 2021. For UK trade with other countries, please refer to the next chapter.
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While the UKGT may not have been graced with much global attention when it was released, the UK government strongly emphasized the promotion of its benefits in their news alerts. These promoted benefits include:
On trade agreements overall, however, there has been progress but there is still a way to go. You can find the status as of March 3, 2021 listed below. For new updates, please refer to the UK government page linked underneath.
Note: Some of these agreements are subject to provisional application. This is a well established method in international treaty practice to bring agreements into effect ahead of entry into force. Bridging mechanisms are an alternative means to ensure continuity of trade, where the UK or treaty partners are unable to fully ratify or provisionally apply an agreement. These non-binding mechanisms include Memoranda of Understanding or Exchange of Diplomatic Notes and ensure continuity of trade.
Note: The UK has committed to apply preferential tariff rates on goods imported into the UK from Mexico from January 1, 2021. In return, Mexico has committed to implement a tariff rebate scheme, so that as soon as the Trade Continuity Agreement enters into force in Mexico, any businesses that have paid tariffs on goods which would attract a preference under the agreement, between January 1 and the agreement coming into force will be able to get a refund.
Note: For these countries, the UK government has put in place the UKGT. Trade with other WTO members is taking place on WTO terms and trade with eligible developing countries is taking place under the UK’s Generalised Scheme of Preferences.
Signed:
Covered in trade agreements:
Go to the UK government website for the latest status on trade agreements
