If no agreement is reached by December 31, many imports and exports will be billed, which could drive up prices for businesses and consumers. “It makes sense: negotiating presidents want to make deals that they have started, which will be part of their legacy,” say authors Caroline Freund and Christine McDaniel. The Transatlantic Trade and Investment Partnership (TTIP), which is being negotiated between the US and the EU, would become the world`s largest trade agreement, with 45% of global GDP. On 23 October, the UK government signed a new trade agreement with Japan, which means that 99% of UK exports will be tariff-free. Any existing EU agreement, which will not be rushed, will end on 31 December and future trade will take place on WTO terms until an agreement is reached. Even the nuclear option – a hard Brexit followed by the invocation of existing World Trade Organization (WTO) rules – could take years. The first, and even more surmountable, problem is that Britain has signed up with its accession to the EU WTO agreements. Assuming that other WTO members agree not to do so and to transfer existing rights to Britain without looking for unpopular elements, there is an even more serious problem. This relates to intermediate and export quotas that are distributed among EU Member States. In the case of lamb meat, for example, the WTO timetable allows 283,825 tonnes of sheep and goat meat to be imported into the EU from 14 countries, with the exception of 100 tonnes from Greenland. If the UK were to act in accordance with WTO rules, tariffs would apply to most of the products that British companies send to the EU. This would make British goods more expensive and more difficult to sell in Europe. The UK could also do so for EU products if it so wishes.
The UK has left the EU, but its trade relations remain unchanged until the end of the year. That`s because it`s in an 11-month transition – designed to give both sides some time to negotiate a new trade deal. As early as April, President Barack Obama warned that it would take up to 10 years for the UK to negotiate trade deals with the United States and that it would be “lagging behind” if it launched the European Union. On the other hand, the free trade agreement with Jordan, the first Arab nation to have a free trade agreement with the United States, was the fastest. The negotiations lasted only four months and the agreement was implemented in a year and a half. The talks began in 2008 and the agreement was signed by 12 countries earlier this year, but ratification and implementation are considered unlikely before President Obama leaves office. It is one of the largest trade agreements in the world and covers 40% of the world economy, so it is not surprising that the Trans-Pacific Partnership (TPP) has lasted longer than other U.S. free trade agreements.