A year in review: world trade deals in 2023
As the year draws to a close, we look back on the major trade deals around the world and their impact on customs. Read our picks for world trade deals in 2023, here.
The EU-Singapore Digital Partnership (EUSDP)
In February, the European Union and Singapore signed the EUSDP – a digital-only customs agreement. The EU-Singapore Digital Partnership allows services to be traded with less red tape, enabling businesses to better provide security, 5G and 6G networks, payments and digital IDs. In 2021, the digital service industry between the two countries was valued at over $50 billion.
This is the fifth digital-only trade deal that Singapore has created, with the first only being agreed with the UK in June of 2022.
Looking ahead, Singapore is currently in discussions with Switzerland to close another digital trade deal with the EFTA countries – upgrading their connection to markets across Europe.
The EU and New Zealand sign trade agreement
In July 2023, the European Union and New Zealand signed a trade deal after five years of negotiations. EU companies are expected to save over €140 million a year in duty and bilateral trade is forecasted to grow over 30% because of this deal.
Digital trade and services are also included in the deal, with key sectors such as compliance and intellectual property, telecommunications, investment and financial services, and logistics all due to benefit. Data and labour standards are also written into the deal, ensuring safe and fair conditions for companies and workers.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
On the 16th July 2023, the UK officially signed the treaty to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The CPTPP is a free trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. The agreement allows goods and services to be traded between members with reduced red tape and taxes so that countries in the partnership can thrive.
The UK already has free trade agreements with nine of the 11 members, but the early adoption means that the United Kingdom will automatically benefit from any new members.
There is also an immediate benefit for you if you trade with Brunei and Malaysia, such as the reduction of import duty on whisky from 80% to 0% in Malaysia. Alongside the reduction in US duty on whisky and the direct liner route between Scotland and China created last year, the growing Scotch whisky industry continues to be supported by trade deals.
The Atlantic Declaration between the UK and USA
Accounting for about 16.3% of the UK’s trade in 2022, the USA is the UK’s largest trading partner. The UK s also the USA’s seventh largest trading partner.
Despite the solid trading relationship between the two countries and the anticipation of a free trade deal after Brexit, one has not been agreed. However, both countries have committed to future growth with the Atlantic Declaration - supported by both UK Prime Minister Rishi Sunak and US President Joe Biden.
Part of the Atlantic Declaration is an action plan to strengthen supply chains and economies by developing digital technology. It is forecasted that the creation of a “digital bridge” will allow both countries to share data, facilitating bilateral investment and support in key projects. Other areas of focus are critical mineral mining, clean energy development, and artificial intelligence.
The UK’s 2022 FTAs with Australia and New Zealand came into effect
The A-UKFTA and NZ-UKFTA both came into effect on the 31st of May, allowing for reduced red tape when trading services and lower duty rates for goods traded.
Rest of the world
China extends free trade footprint in South America with Ecuador deal and Columbia partnership
China and Ecuador signed a free trade agreement in May which allowed for lower tariffs on industrial, agro-industrial, and agricultural goods. This strengthened China’s trade to the region, with deals already in place with Chile, Costa Rica, and Peru.
Columbia and China have also elevated their relationship to a strategic partnership, with Chinese imports to Columbia increasing over the last year.
US and Taiwan sign trade pact, with more agreements to follow
Goods and services traded between the US and Taiwan were estimated at USD 160 billion in 2022. In June 2023, the two countries signed a trade pact, with the intention to create more definite agreements for the future.
Taiwan hopes that the agreement with the US will help them prove that they are a reliable independent trader in the international market, opening up discussions with other countries in the future.
Looking ahead to 2024
There are several trade deals which have not been concluded this year, but will hold significance when completed. Here’s what to watch in 2024:
EU – Australia
Despite several rounds of negotiations and the intention to finalise a free trade agreement, the European Union and Australia have been unable to close a deal this year. Sticking points include the trade of beef, sheep, and sugar, which for which Australia wants better access to EU markets.
EU – Mercosur
Key to providing an alternative to China on supplying essential minerals, the European Union and the Mercosur countries have been in intense discussions this year.
However, the negotiations are currently on hold due to the need for Argentina’s new government to be involved before they can continue.
EU – Thailand
Paused in 2014 due to a coup in Thailand, the European Union has resumed talk with the region this year. It is hoped that a comprehensive free trade agreement can be reached with Thailand, covering sanitary and phytosanitary conditions, services and digital trade, sustainability, and raw material supply.
EU – USA
Despite being each other’s largest trading partners, there is no free trade agreement between the EU and the US.
Negotiations for trade deals have been overshadowed by the need to focus on conflicts across the globe; however, there has been some progress on removing hard tariffs adopted by ex-President Trump’s administration.
Looking forwards, both sides look to promote greener steel supply and to prevent the EU’s Carbon Border Adjustment Mechanism from blocking this trade in future. There are also talks on how electric vehicle manufacturing and customs duties will look like as EV vehicles become more widely adopted.
UK – India
Following multiple rounds of negotiations throughout 2023, the UK and India are aiming to conclude on their free trade deal in January 2024 – ahead of the April 2024 elections.
Need advice on how trade deals affect your business?
You can rely on Customs Support to help you navigate customs changes from trade deals. Our customs consultants provide businesses like yours with advice throughout Europe, working out of 13 countries across the EU and UK.