If no agreement is reached and ratified by 31 December, the UK and the EU could impose import duties on the other company`s products. Continued trade with the other EEA member, Liechtenstein and Switzerland, which is neither a member of the EU nor the EEA but is part of the EU`s internal market, is part of an agreement already signed in February. A free trade agreement aims to promote trade – usually with goods, but also sometimes with services – by making it cheaper. This is often achieved by reducing or eliminating so-called tariffs – taxes or taxes on cross-border trade. 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. German European Affairs Minister Michael Roth said the outcome of the meeting of heads of state and government was “totally uncertain” as there has been “no significant progress” in recent weeks and “fundamental disagreements” remain. If no agreement is reached by December 31, many imports and exports will be billed, which could drive up prices for businesses and consumers. Norway negotiates a comprehensive free trade agreement with the other EFTA countries, Iceland and Liechtenstein. While the negotiations are in full swing, they are lagging behind schedule, not least because they were not fully launched until August due to delays in the UK.
A free trade agreement cannot replace the EEA agreement, however broad and ambitious it may be, and the Norwegian economic sector must prepare to face new trade barriers when the UK leaves the internal market. The fixed-term agreement will be based on the agreement signed in April 2019 by Norway and the UNITED Kingdom, which guarantees continuity of trade in the event of the UK leaving the EU without a deal. Trade with Japan represents only 2% of the UK`s total volume, so the government expects the agreement to contribute 0.07% of GDP in the long term. Just 11 days before Britain is legally out of the bloc, the government has yet to secure Parliament`s support for its Brexit deal with Brussels. At a meeting of EU heads of state and government this week, Prime Minister Theresa May said she would seek to delay Brexit, but any extension must be decided unanimously. Apart from that, the UK and the EU have agreed in recent months, after lengthy discussions, on how the rules of the Brexit withdrawal agreement will be implemented, particularly with regard to Northern Ireland. Negotiations for a free trade agreement are underway and the parties are working to conclude negotiations as soon as possible. However, much remains to be done before a free trade agreement comes into force.