Existing frameworks for how trade is facilitated between countries in this sector

The arrangements described in this section are examples of existing arrangements between countries. They should not be taken to represent the options being considered by the Government for the future economic relationship between the UK and the EU. The Government has been clear that it is seeking pragmatic and innovative solutions to issues related to the future deep and special partnership that we want with the EU.

There are a number of existing arrangements, which govern the way in which other countries trade with each other in this sector. The sector characteristics of retail mean that it is significantly affected by horizontal customs and services regulation, as well as legislation facilitating online commerce.

In terms of existing arrangements facilitating broad trade in services, the baseline is the World Trade Organisation’s (WTO) General Agreement on Trade in Services (GATS). GATS is a services-specific multilateral agreement that has been used as a basis for services liberalisation since it came into force in January 1995. All WTO Members are parties to GATS which sets out general rules, principles and obligations as a framework for trade in services; plus a schedule of commitments which set out how open and non-discriminatory parties commit to be across the service sectors
covered.

GATS also sets out ‘how’ parties will allow services to be traded and this is split into four principal ‘modes’: where a product rather than a service supplier/consumer crosses a border; where the consumer of the service crosses a border; where the company crosses a border (e.g. a retail chain opening a new establishment in another country); and where the service provider moves. Commitments taken by parties vary and parties can unilaterally choose to improve their GATS offers at any point (subject to a certification procedure) or lower the level of their commitments, but in order to do so they will be expected to offer compensatory concessions.

In terms of regulations governing e-commerce trade, some provisions are included in the EU-Korea Free Trade Agreement, as well as in the EU-Canada Comprehensive Economic and Trade Agreement (CETA). CETA includes a chapter on e-commerce, which includes commitments to reduce customs duties on electronic deliveries.

. Customs arrangements are increasingly important for retail sector due to the rising demand for cross-border online purchases. The EU has customs facilitation agreements with a number of third countries, including Canada, South Korea and Switzerland. These agreements differ in the depth and scope of facilitation offered, but in summary, include:
• CETA provides, for example, that the parties adopt or maintain simplified customs procedures in order to facilitate trade between the Parties and reduce costs for importers and exporters. The Parties agree to applying risk assessment principles to the decision to examine goods, rather than requiring each shipment offered for entry to be. The EU and Canada also undertake to cooperate on interoperable systems and in international fora;
• EU-South Korea Free Trade Agreement – provides, for example, the advance electronic submission and processing of information before physical arrival of goods, in addition to the parties endeavouring to apply simplified procedures for economic operators; and
• Agreement with Switzerland – provides for general cooperation and administrative assistance, mutual recognition of inspections and documents