Monday 13 February 2017 4:50 pm

UK firms warned trade with more than 40 non-EU locations will be disrupted post-Brexit, as current trade deals depend on EU membership

By: Hayley Kirton

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UK firms are today being warned they might want to look further afield than the EU for areas where trade could be interrupted. 

The UK's current trade arrangements with over 40 locations, including South Korea, Switzerland and Mexico, are in place because of the country's EU membership, warns a report by law firm Clifford Chance and the Confederation of British Industry (CBI).

For example, the UK at present trades with South Korea through the EU-South Korea Free Trade Agreement (FTA). Any businesses relying on this agreement could find themselves in hot water post-Brexit until an equivalent UK-South Korea deal is put in place.

Read more: Lord mayor is the latest to lead a Chinese trade mission

The EU is also in the process of negotiating or finalising about 30 further trade treaties, including ones with China and Japan, as well as the EU-Canada Comprehensive Economic and Trade Agreement, or CETA. The UK will not be able to benefit from these once it is no longer an EU member.

The EU and the US have also gone through 15 rounds of negotiations for the Transatlantic Trade and Investment Partnership. However, it is not clear how quickly this particular deal will progress now that President Donald Trump, who has already pulled the US' involvement from the Trans-Pacific Partnership, is in the White House.

Read more: Labour shortages start to bite in UK sectors employing many EU nationals

"The changes to come won't just affect big UK businesses that export to the EU or through EU trade deals," cautioned Jessica Gladstone, an international law and trade partner at Clifford Chance. "For example, any UK or EU27 manufacturer that is part of a complex EU supply chain could be at risk because of the way FTAs work.

"This is just one of many issues that could trip businesses up if they aren't prepared."

Josh Hardie, CBI deputy director-general, added:

A new relationship with the EU is potentially only two years down the track, so it is critical that businesses – of every size, sector and region – know, understand and feel comfortable navigating information and data about trading globally in order to make informed decisions for their futures.

Read more: Is it the EU that's unprepared for the implications of Brexit?

The EU, and countries which have EU trade deals, make up 85 per cent of the UK's current trade.

Theresa May had much to say about trade in her landmark Brexit speech last month. The Prime Minister promised a "a bolder embrace of free trade" for the UK outside the EU.

However, May also warned EU members who didn't want to play ball at the negotiating table that she was willing to fall back onto WTO rules, adding: "No deal for Britain is better than a bad deal for Britain." 

Here's the full list of areas with current EU trade treaties identified in the Clifford Chance report: