New research – Trade deals with five key countries could take 26 years to negotiate

It could take 26 years before free trade agreements with the United States, China, India, Australia and New Zealand all come into force, according to new analysis published today by Open Britain. 

These countries are the most commonly cited by Liam Fox and other ministers as priority targets for free trade negotiations after Brexit. Research by Open Britain has calculated the average length of time it takes for each of them to secure free trade agreements, from the beginning of negotiations through to them coming into force:

  • India takes on average 6 years and 11 months;
  • China takes on average 5 years and 9 months;
  • Australia takes on average 5 years and 1 month;
  • New Zealand takes on average 4 years and 7 months;
  • and the United States takes on average 3 years and 9 months.

These add up to 26 years, meaning if the Government sought to negotiate with of each these countries consecutively, beginning in March 2019, it could hope to have deals with all five countries in place by 2045. Even then, the Government’s own analysis says a trade deal with the US would only benefit GDP by about 0.2% in the long term, with deals with other non-EU countries adding just a further 0.1% to 0.4% to GDP over the long term.

Liam Fox has said his department doesn’t currently have the capacity to negotiate major free trade agreements. This means the Government may not be able to take on more than one set of negotiations at the same time. In addition, it will likely be busy negotiating the free trade agreement with the EU well into the 2020s.

 

Commenting, Peter Kyle MP, leading supporter of Open Britain, said: 

As new information, like the enormous length of time it is likely to take to negotiate any new trade deals, comes to light, we all have the right to ask if Brexit remains the best choice for our country and to keep open the option of saying ‘no thanks’ to what Theresa May brings back from her negotiations.”

 

Lord Patten, former EU Commissioner, trade negotiator and leading supporter of Open Britain, said:

“Trade negotiations are nasty, brutish and long. After a hard Brexit the UK will not be in a position to dictate terms to major economies like the US and China.

“Under pressure from ministers to salvage something after Brexit, ministers risk being taken for a ride by President Trump and others who will insist we lower our food and environmental standards – and possibly open up our NHS – so that their industries can get a foothold in the UK.”

/ends

 

Notes to Editors

  • See the below for a full breakdown of all free trade agreements negotiated by the US, China, India, Australia and New Zealand. This shows the average length of time it takes for each country to secure free trade agreements, from the beginning of negotiations through to them coming into force. If negotiations were ongoing as of 20 December, or if they were complete but the agreement is yet to come into force, we have assumed 20 December as the implementation date.

  • Liam Fox has said his department currently doesn’t have the capacity to negotiate free trade agreements:

    “There are a number of countries who said they would like to move directly to a new free-trade agreement but we have said we are simply unable to do that at the moment. It requires the willingness of the country involved to want to move the process further on and it’s dependent on our own capacity in our own department.”
    Liam Fox, Politico, 4 September 2017
    https://www.politico.eu/article/brexit-trade-negotiations-liam-fox-britain-does-not-have-capacity-to-strike-deals-now/

  • There is no reason to believe that the UK’s negotiations with any of these five countries will be abnormally swift. A quick deal with the US would mean Britain has capitulated and allowed American food and health companies full access to the UK market, including for products like chlorinated chicken and hormone beef, while achieving little penetration into the US market for Britain’s financial and other services industries.

  • In the case of India, to get trade talks started the UK would need to agree to grant more visas for India workers, something the UK government blocked in the EU-India FTA talks.

  • China, meanwhile, is deeply protective of its services sector. In return for any kind of trade deal, Beijing would likely want Britain to advocate for it to be granted “market economy status” at the World Trade Organisation.

UNITED STATES

       

FTA

Launch of talks

Implemented

Total (months)

 

Jordan

   

18

 

Dominican Republic

   

37

 

Bahrain

   

30

 

Oman

   

45

 

Korea

   

69

 

Australia

   

22

 

Israel

   

29

 

Morocco

   

35

 

Costa Rica

   

71

 

El Salvador

   

37

 

Guatemala

   

40

 

Honduras

   

38

 

Mexico

   

31

 

Nicaragua

   

38

 

Canada

   

32

 

Peru

   

56

 

Singapore

   

37

 

Chile

   

36

 

Colombia

   

96

 

Panama

   

102

 

Average:

   

45

 

In years:

   

3 years & 9 months

 

 

CHINA

       

FTA

Launch of talks

Implemented

Total (months)

 

Georgia

14-Dec-15

Jan-18

26

 

Australia

Apr-05

Dec-15

128

 

South Korea

May-12

Dec-15

43

 

Switzerland

Jan-11

Jul-14

42

 

Iceland

Apr-07

Jul-14

87

 

Costa Rica

Jan-09

Aug-11

32

 

Peru

Sep-07

Mar-10

30

 

Singapore

Aug-06

Jan-09

29

 

New Zealand

Dec-04

Oct-08

46

 

Chile

Oct-04

Oct-06

24

 

Pakistan

Apr-05

Jul-07

27

(although services were not included until October 2009)

ASEAN

Nov-02

Jan-10

86

 

RCEP

Nov-12

Ongoing

65

 

GCC

Jul-04

Ongoing

165

 

China-Korea-Japan

Nov-12

Ongoing

65

 

Sri Lanka

Sep-14

Ongoing

44

 

Maldives

Dec-15

Ongoing

28

 

Israel

Mar-16

Ongoing

25

 

Norway

Sep-08

Ongoing

115

 

India

Mar-04

Ongoing

170

 

Average:

   

69

 

In years:

   

5 years & 9 months

 

 

 

INDIA

     

FTA*

Launch of talks

Implemented

Total (months)

Singapore

Jun-03

Aug-05

26

Chile

Jan-07

Sep-07

32

Japan

Jan-07

Aug-11

54

South Korea

Mar-06

Jan-10

45

Malaysia

Jan-08

Jul-11

42

Mercosur

Jun-03

Jan-09

67

Sri Lanka

Aug-98

Dec-01

39

South Asia Free Trade Area

Jul-99

Jan-06

66

ASEAN

Mar-04

Jan-10

68

Eurasian Economic Union

Jul-15

Ongoing

34

Australia

Jul-07

Ongoing

128

RCEP

Nov-12

Ongoing

65

Canada

Nov-10

Ongoing

89

Egypt

Nov-02

Ongoing

185

EU

Jun-07

Ongoing

129

EFTA

Jan-08

Ongoing

123

Indonesia

Oct-11

Ongoing

78

Israel

Jan-06

Ongoing

148

Mauritius

Aug-05

Ongoing

153

Southern Africa CU

Oct-07

Ongoing

126

Thailand

Jan-14

Ongoing

40

New Zealand

Apr-10

Ongoing

96

Average:

   

83

In years:

   

6 years & 11 months

 

AUSTRALIA

     

FTA

Launch of talks

Implemented

Total (months)

New Zealand

Mar-80

Jan-83

34

Singapore

Mar-01

Jul-03

16

United States

Nov-02

Jan-05

26

Thailand

May-02

Jan-05

33

Chile

Jul-07

Mar-09

22

ASEAN-New Zealand

Nov-04

Jan-10

62

Malaysia

Apr-05

Jan-13

93

Korea

May-09

Dec-14

67

Japan

Apr-07

Jan-15

93

China

May-05

Dec-15

126

GCC

Jul-07

Ongoing

128

Hong Kong

May-17

Ongoing

11

India

Jul-07

Ongoing

128

Indonesia

Nov-10

Ongoing

85

Pacific Agreement on closer economic relations

Aug-09

Ongoing

100

Pacific Alliance FTA

Jun-17

Ongoing

10

Peru

May-17

Ongoing

11

Regional Comprehensive Economic Partnership

Nov-12

Ongoing

61

Average:

   

61

In years:

   

5 years & 1 months

 

NEW ZEALAND

     

FTA

Launch of talks

Implemented

Total (months)

China

Oct-03

Oct-08

60

Australia

Mar-80

Jan-83

34

ASEAN/Australia

Mar-05

Jan-12

82

Hong Kong

May-09

Jan-11

20

Malaysia

Mar-05

Aug-10

65

Singapore

Sep-99

Jan-01

16

Thailand

Jun-04

Jul-05

13

NZ, Chile, Singapore & Brunei

Sep-03

May-06

20

South Korea

Jul-13

Dec-15

29

PACER+

Aug-09

Completed; not yet in force

104

GCC

Nov-07

Ongoing

124

India

Apr-10

Ongoing

96

Russia-Belarus-Kazakhstan

Nov-10

Ongoing

89

RCEP

Nov-12

Ongoing

65

Pacific Alliance FTA

Jun-17

Ongoing

10

Average:

   

55

In years:

   

4 years & 7 months