UK Continuity Agreements: What Are They and Why Are They So Important?
With Brexit looming large, there are many issues to consider, one of which is the UK`s continuity agreements with third countries. These agreements govern the trade relationship between the UK and countries outside of the EU that currently have trade deals in place with the EU. But what exactly are UK continuity agreements, and why are they so crucial?
What Are UK Continuity Agreements?
The UK has been trying to replicate existing EU trade agreements with third countries in order to minimize disruption to trade after Brexit. These agreements aim to maintain the same trading conditions between the UK and these countries that were previously enjoyed when the UK was part of the EU. So far, the UK has signed continuity agreements with countries such as Switzerland, Chile, and Israel, among others.
Why Are UK Continuity Agreements So Important?
UK continuity agreements are vital for maintaining trade flows between the UK and third countries. If these agreements are not put in place, the UK will revert to trading with these countries under the general rules of the World Trade Organization (WTO), resulting in higher tariffs and non-tariff barriers.
Additionally, continuity agreements are essential for maintaining the integrity of the UK`s supply chains. For businesses that rely on trade with these countries, a lack of continuity agreements could result in disrupted supply chains, increased costs, and decreased competitiveness.
For example, the automotive industry in the UK relies heavily on imports of components from countries such as Japan, Turkey, and South Korea. Without continuity agreements, these imports could become more expensive, which would lead to higher costs for UK manufacturers and could potentially make them less competitive against companies in other countries.
UK continuity agreements are essential for maintaining the UK`s trade relationships with third countries outside of the EU, ensuring that trade flows are not disrupted and that the integrity of supply chains is maintained. With Brexit on the horizon, it is crucial that the UK government continues to work towards securing these agreements in order to minimize the potential negative impacts on the UK economy.