The EU-UK Trade Agreement Document: Key Points to Know

After years of negotiations, the European Union (EU) and the United Kingdom (UK) finally reached an agreement on their future relationship post-Brexit. The EU-UK Trade Agreement, also known as the Trade and Cooperation Agreement (TCA), was signed on December 24th, 2020, and came into effect on January 1st, 2021.

The 1,246-page document covers a wide range of topics, from trade to fishing, energy to transport, and more. Here are some key points that you should know about the EU-UK Trade Agreement:

1. Tariff-free and quota-free trade

One of the most significant achievements of the EU-UK Trade Agreement is that it allows for tariff-free and quota-free trade between the two parties. This means that goods can be traded between the EU and the UK without paying additional taxes or facing restrictions on the amount that can be traded.

However, it`s worth noting that this only applies to goods that comply with the rules of origin. In other words, products that have been manufactured using materials from outside the EU or UK may still face tariffs or quotas.

2. Rules of origin

To benefit from tariff-free and quota-free trade, businesses must comply with the rules of origin set out in the EU-UK Trade Agreement. These rules determine whether a product can be considered as originating from the EU or the UK and therefore eligible for preferential treatment.

The rules of origin are complex and vary depending on the product. For example, a car must have at least 45% of its value added in either the EU or the UK to be considered as originating from that country.

3. Fisheries

The EU-UK Trade Agreement also includes provisions on fisheries, which were a contentious issue during the negotiations. Under the agreement, the EU will gradually transfer 25% of its current fishing rights in UK waters to the UK over a period of five and a half years.

After this transition period, both parties will negotiate annually on access to each other`s waters. If no agreement is reached, the UK can choose to deny access to EU fishing vessels, but this may result in tariffs being imposed on UK exports to the EU.

4. Services

Unlike goods, services are not covered by tariff-free and quota-free trade under the EU-UK Trade Agreement. Instead, the agreement provides for market access to each other`s services sectors, but this is limited in some areas.

For example, UK-based financial services companies can no longer enjoy the automatic right to provide services in the EU, and must comply with EU regulations to access the market.

5. Dispute resolution

The EU-UK Trade Agreement includes a dispute resolution mechanism, which allows for disputes to be resolved through consultations and negotiations. If this fails, an independent arbitration panel can be set up to make a binding ruling.

This mechanism is similar to that used in other international trade agreements, but there are concerns that it may not be sufficient to resolve disputes between the EU and the UK, given the complexity of their relationship.

In conclusion, the EU-UK Trade Agreement is a complex document that covers a wide range of issues. While it provides for tariff-free and quota-free trade between the EU and the UK, there are many other provisions that businesses need to be aware of, particularly around rules of origin and services. It`s important to seek legal advice if you`re unsure about how the agreement may affect your business.