What’s in the EU-UK Trade Cooperation Agreement after BREXIT?

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Who wins, who loses?

Since 1st January the Agreement has been applied provisionally, pending the vote of the European Parliament. The EU Commission proposed to apply the Agreement on a provisional basis only for a limited period of time, until 28 February 2021


After a process that started in 2016, the UK has left the EU. What will be the most striking consequences?
The EU is strong on the international stage, at least for trade. Will the The UK will be able to survive alone in a globalized world, where does size and alliances matter?
Perhaps Europeans have not yet realized that the EU is capable of imposing the rules of the game on the world stage.
Any technical standard it introduces is quickly accepted by all countries in the world trading with EU. Why? Because the EU is the world’s leading trading power and the market it represents is too important. Therefore, even the United Kingdom will have to adopt European standards and not being able to negotiate them as it had done so far. This is why the UK seeks new trade alliances by fishing in its historical areas of influence, but so far it has done so with countries that cannot guarantee factors of scale that the EU could guarantee. This could cause damage to the UK industry and economy as manufacturers will have to quickly readjust to their new markets.
But surely the EU will also have a price to pay. This has been highlighted by the emergence of the pandemic and beyond.
Supplies with England have already suffered hitches and delays and, as far as vaccines are concerned, the solidarity between the UK and the EU is suffering a lot.
Will there be a vaccine war? The EU and the UK must now demonstrate a solidarity which, if not written in the Treaties, must still remain at the ethical basis of the relations between two solid democracies.


Big changes

On 1 January 2021, the UK left the EU Single Market and Customs Union, as well as all EU policies and international agreements. The free movement of persons, goods, services and capital between the UK and the EU arrived at the end. Today, the EU and the UK form two separate markets; two distinct regulatory and legal spaces. This will create barriers to trade in goods and services and to cross-border mobility and exchanges that do not existed before – in both directions.
The Trade and Cooperation Agreement consists of three main pillars:
  • A Free Trade Agreement: a new economic and social partnership with the United Kingdom 
    • The agreement covers not just trade in goods and services, but also a broad range of other areas in the EU’s interest, such as investment, competition, State aid, tax transparency, air and road transport, energy and sustainability, fisheries, data protection, and social security coordination.
    • It provides for zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin.
    • Both parties have committed to ensuring a robust level playing field by maintaining high levels of protection in areas such as environmental protection, the fight against climate change and carbon pricing, social and labour rights, tax transparency and State aid, with effective, domestic enforcement, a binding dispute settlement mechanism and the possibility for both parties to take remedial measures.
    • The EU and the UK agreed on a new framework for the joint management of fish stocks in EU and UK waters. The UK will be able to further develop British fishing activities, while the activities and livelihoods of European fishing communities will be safeguarded, and natural resources preserved.
    • On transport, the agreement provides for continued and sustainable air, road, rail and maritime connectivity, though market access falls below what the Single Market offers. It includes provisions to ensure that competition between EU and UK operators takes place on a level playing field, so that passenger rights, workers’ rights and transport safety are not undermined.
    • On energy, the agreement provides a new model for trading and interconnectivity, with guarantees for open and fair competition, including on safety standards for offshore, and production of renewable energy.
    • On social security coordination, the agreement aims at ensuring a number of rights of EU citizens and UK nationals. This concerns EU citizens working in, travelling or moving to the UK and to UK nationals working in, travelling or moving to the EU after 1st January 2021.
    • Finally, the agreement enables the UK’s continued participation in a number of flagship EU programmes for the period 2021-2027 (subject to a financial contribution by the UK to the EU budget), such as Horizon Europe.
  • A new partnership for EU citizens’ security
    • The Trade and Cooperation Agreement establishes a new framework for law enforcement and judicial cooperation in criminal and civil law matters. It recognises the need for strong cooperation between national police and judicial authorities, in particular for fighting and prosecuting cross-border crime and terrorism. It builds new operational capabilities, taking account of the fact that the UK, as a non-EU member outside of the Schengen area, will not have the same facilities as before. The security cooperation can be suspended in case of violations by the UK of its commitment for continued adherence to the European Convention of Human Rights and its domestic enforcement.
  • A horizontal agreement on Governance: A framework that stands the test of time
    • To give maximum legal certainty to businesses, consumers and citizens, a dedicated chapter on governance provides clarity on how the agreement will be operated and controlled. It also establishes a Joint Partnership Council, who will make sure the Agreement is properly applied and interpreted, and in which all arising issues will be discussed.
    • Binding enforcement and dispute settlement mechanisms will ensure that rights of businesses, consumers and individuals are respected. This means that businesses in the EU and the UK compete on a level playing field and will avoid either party using its regulatory autonomy to grant unfair subsidies or distort competition.
    • Both parties can engage in cross-sector retaliation in case of violations of the agreement. This cross-sector retaliation applies to all areas of the economic partnership.


And what about the External and defence cooperation?

Foreign policy, external security and defence cooperation are not covered by the Agreement as the UK did not want to negotiate this matter.


>>> EU-UK Trade and Cooperation Agreement: An analytical overview


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