This is something which also seems relevant further down the line in terms of the Northern Ireland backstop. /1
Article 129 WA includes a footnote whereby the EU commits to ask EU contracting parties to treat UK as a Member State. This is because during the transition, UK is bound by the EU's international obligations but can only benefit from FTAs if it is considered as a Member State. /2
In the Northern Ireland Protocol, NI will comply with EU internal market rules on goods and all EU customs legislation. This precludes NI from benefiting from the trade in goods components of future UK FTAs. /3
But NI will have to comply with obligations under EU FTAs. Protocol Article 6(2) refers to Annex 2 which states that the UK will have to align its tariffs with Article 56(2) of the Union Customs Code. This includes preferential tariff measures negotiated under EU FTAs. /4
Annex 5 of the Protocol provides NI must comply with the “obligations stemming from the international agreements concluded by the Union ..., in so far as they relate to trade in goods between the Union and third countries’ /5
In other words, NI must give preferential access to goods originating from countries with which the EU has signed FTAs. /6
However, there is no provision that NI would benefit from the rights (i.e. preferential access) in these agreements. Not even a footnote whereby the EU would ask its trading partners to extend preferential treatment under EU FTAs to third countries. /7
So, under the NI protocol, NI potentially stands to lose preferential market access re goods negotiated under EU and future UK FTAs. /8
Economically, this may not be that important. It may be that NI exports very little to third-countries and that the benefit of staying in the internal market in goods more than makes up for the loss of preferential access to countries with which the UE currently has FTAs. /9
That said, why not replicate the footnote to Article 129 WA in the NI Protocol and allow NI firms to potentially benefit from EU FTAs under the backstop? /10
