Trade and Cooperation Agreement between the European Union
On December 24, 2020, the European Union (EU) and the United Kingdom (UK) reached a trade and cooperation agreement to govern their relationship after the UK`s exit from the EU on January 31, 2020. The agreement, commonly known as the EU-UK Trade and Cooperation Agreement (TCA), came into effect on January 1, 2021.
The TCA sets out the terms of the future relationship between the EU and the UK, covering trade in goods and services, investment, competition, and regulatory cooperation. It also includes provisions on fisheries, transport, energy, law enforcement, and judicial cooperation in criminal matters.
One of the main aspects of the TCA is the establishment of a free trade area between the EU and the UK. This means that there will be no tariffs or quotas on goods traded between the two sides, provided that the products meet certain rules of origin criteria. However, significant non-tariff barriers, such as customs formalities and regulatory requirements, will remain in place, adding costs and complexity to trade.
The TCA also includes provisions on services and investment, which are particularly important for the UK`s economy, given the significant share of its GDP that is generated by the services sector. The agreement provides for limited market access for service providers, such as lawyers, architects, and accountants, but falls short of the broader access that the UK had as an EU member state.
Another key element of the TCA is the agreement on fisheries, which has been a highly contentious issue in the negotiations. The agreement establishes a framework for cooperation on fisheries management, but it falls short of the access that UK fishermen had to EU waters before Brexit. The UK will gradually regain control of its waters over a five-and-a-half-year period, during which EU fishing vessels will continue to have access, subject to quotas.
Overall, the TCA represents a significant achievement in the Brexit process, providing a basis for continued trade and cooperation between the EU and the UK, while respecting each other`s sovereignty and regulatory autonomy. However, the agreement is far from perfect, and it will require ongoing negotiation and monitoring to ensure its effective implementation and evolution over time.