The EU-UK Trade and Cooperation Agreement covers the following areas: trade in goods and in services, digital trade, intellectual property, public procurement, aviation and road transport, energy, fisheries, social security coordination, law enforcement and judicial cooperation in criminal matters, thematic cooperation and participation in Union programmes. It is underpinned by provisions ensuring a level playing field and respect for fundamental rights.
The Agreement will confer rights and obligations on both the EU and the UK, in full respect of their sovereignty and regulatory autonomy. It will be governed by an institutional framework on the operation and enforcement of the Agreement, as well as binding dispute settlement and enforcement mechanisms.
Provisional application and ratification process
The entry into application of the Trade and Cooperation Agreement is a matter of special urgency.
- The United Kingdom, as a former Member State, has extensive links with the Union in a wide range of economic and other areas. If there is no applicable framework regulating the relations between the Union and the United Kingdom after 31 December 2020, those relations will be significantly disrupted, to the detriment of individuals, businesses and other stakeholders.
- The negotiations could only be finalised at a very late stage before the expiry of the transition period. Such late timing should not jeopardise the European Parliament’s right of democratic scrutiny, in accordance with the Treaties.
- In light of these exceptional circumstances, the Commission proposes to apply the Agreement on a provisional basis, for a limited period of time until 28 February 2021.
What changes on 1 January 2021?
As of 1 January 2021, the UK leaves the EU Single Market and Customs Union. As a result, it will no longer benefit from the principle of free movement of goods.
Even with the new agreement in place, businesses will face new trade barriers, leading to increased costs and requiring adjustments to integrated EU-UK supply chains.
What is covered by the draft agreement?
To preserve their mutually beneficial trading relationship, the two sides have agreed to create an ambitious free trade area with no tariffs or quotas on products, regulatory and customs cooperation mechanisms, as well as provisions ensuring a level playing field for open and fair competition, as part of a larger economic partnership.
The provisions in the agreement do not govern trade in goods between the EU and Northern Ireland, where the Protocol on Ireland and Northern Ireland included in the Withdrawal Agreement will appl
Will the Trade and Cooperation Agreement allow goods to be exchanged between the EU and the UK as they are today?
Trading under ‘FTA’ (free trade agreement) terms – even one as ambitious as this one, with zero tarifs or quotas – will inevitably be very different compared to the frictionless trade enabled by the EU’s Customs Union and Single Market.
In particular:
- rules of origin will apply to goods in order to qualify for preferential trade terms under the agreement;
- all imports will be subject to customs formalities and will need to comply with the rules of the importing party;
- and all imports into the EU must meet all EU standards and will be subject to regulatory checks and controls for safety, health and other public policy purposes.
What about trade between Great Britain and Northern Ireland?
The provisions of the Trade and Cooperation Agreement do not govern trade in goods between the EU and Northern Ireland, where the Protocol on Ireland and Northern Ireland included in the Withdrawal Agreement will apply.
In accordance with that Protocol, Union acquis, including the Union Customs Code, legislation on goods, sanitary rules for veterinary controls (“SPS rules”), rules on agricultural production/marketing, or VAT and excise in respect of goods, will apply to all goods entering Nortern Ireland.
As a result, from 1 January 2021, goods entering Northern Ireland from Great Britain will constitute “imports”. This means that such goods will need to comply with EU product rules and be subject to checks and controls for safety, health and other public policy purposes, including all necessary SPS controls applicable between the EU and the UK.
This solution was agreed between the EU and the UK to avoid a hard border on the island of Ireland, protects the all-island economy and the Good Friday (Belfast) Agreement in all its dimensions, and safeguards the integrity of the Single Market.
Following discussions in the Joint Committee on the Implementation of the Withdrawal Agreement, the EU and the UK have agreed to certain flexibilities that will help limit disruptions caused by the implementation of the Protocol on trade between Great Britain and Northern Ireland.
An agreement in principle has been found in the following areas, amongst others: export declarations, the supply of medicines, the supply of certain chilled meats and other food products to supermarkets, and a clarification on the application of State aid under the terms of the Protocol.
For example, certain chilled meat, for which imports in the Union market are normally prohibited, will be accepted for delivery to supermarkets in Northern Ireland during a limited period of 6 months:
- Minced meat of poultry, frozen or chilled. Chilled minced meat from animals other than poultry (e.g. minced beef.
- Chilled meat preparations (e.g. sausages, meatballs, pork pies)..
- Any fresh meat, including minced meat and meat preparations, produced from triangular trade (e.g. EU meat exported to Great Britain, cut or minced in Great Britain and re-exported to Northern Ireland).
Another example is that, during a limited period of 3 months, the goods coming from Great Britain and destined for supermarkets located in Northern Ireland will be accompanied with a simplified, collective certificate covering all the goods transported in the same truck, instead of individual certificates.
During this period of time, the UK shall maintain its current EU SPS legislation for the products concerned.
The scope is limited to a restricted number of food suppliers for supermarkets which are approved by the UK authorities after demonstrating that they meet a range of trust criteria. This list of members will be established by the United Kingdom in cooperation with the European Commission before 31 December 2020 and cannot be extended after that date.
Does the Agreement provide for the recognition of professional qualifications?
As a member of the EU and the EU Single Market, UK nationals and EU citizens holding a qualification from the United Kingdom previously benefitted from a simplified – in some cases automatic – recognition regime in other EU countries, which allowed professionals such as doctors, nurses, dental practitioners, pharmacists, veterinary surgeons, lawyers, architects or engineers to supply services across the European Union, including in the United Kingdom.
As of 1 January, as a general rule, UK nationals, irrespective of where they acquired their qualifications, and EU citizens with qualifications acquired in the United Kingdom will need to have their qualifications recognised in the relevant Member State on the basis of each country’s existing individual rules applicable to the qualifications of third-country nationals as of the end of the transition period.
The Trade and Cooperation Agreement nevertheless foresees a mechanism whereby the EU and the UK may later agree, on a case-by-case basis and for specific professions, on additional arrangements for the mutual recognition of certain professional qualifications.
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