Europe and UK: The next chapter – The Trade and Cooperation Agreement

12 April 2021

The UK left the European Union and its single market and customs union on 31 January 2020, with a transitional period applying until 31 December 2020. On the 24 December 2020 the Trade and Cooperation Agreement (TCA) was provisionally agreed between the EU and the UK.

Whilst the UK Parliament ratified the TCA on 30 December 2020, the EU Parliament is yet to do so and a vote to ratify the TCA seems unlikely before the end of April 2021. Until it does, the TCA remains a provisional agreement only.

The TCA has been heralded by the Government as delivering the Brexit the British public voted for, but it is far from clear what the TCA actually delivers.

The TCA is essentially a framework agreement which establishes the route and mode of the journey by which the UK will forge its future relationship with the EU. Further agreements will need to be negotiated under the common principles and dispute resolution mechanism provided by the TCA. It establishes an institutional framework of a myriad of committees and work groups, presided over by the Partnership Council. In short, the UK will be embroiled in negotiations with the EU for many years and the regime under which they will take place is extremely complicated. Also, the TCA will be reviewed by the EU and UK every five years. As this coincides with the cycle of general elections, the TCA may become a topic of fierce political debate for years to come.

The TCA does, however, contain a free trade agreement which covers the trade in goods, services and investment, digital trade, intellectual property, public procurement, energy and ‘level playing field’ assurances to ensure fair competition between the EU and UK. Most of the free trade agreement does little more than record the commitments of the parties, with the agreement on trade in goods providing the most tangible immediate outcome, with core rules to facilitate free movement of goods with zero tariffs. As we are seeing in the press, however, those rules are proving quite challenging to navigate, particularly those that relate to rules of origin and measures to protect human, animal and plant life. Nonetheless businesses appear to be adapting to the new regime.

The agreement as it relates to services is far less extensive and there is a dearth of clear guidance on the current position. Whilst a lot of press attention is being paid to the movement of goods between the EU and UK, not much is being paid to the impact on the UK’s export of services to the EU and on those businesses that rely on personnel being able to travel to work in EU to facilitate the supply of services.

This belies the potential impact. According to a briefing paper by Matthew Ward on Statistics on UK-EU Trade dated 10 November 2020, in 2019 43% of all UK exports were to the EU, totalling £294bn, and of that amount, 42% related to the export of services.

Financial services and “other business services” represented 54% of UK services exported to the EU. Of this, 21% (£25bn) related to financial services, and 33% related to “other business services”, which includes legal, accounting, advertising, research and development, architectural, engineering and other professional and technical services.

All businesses that trade with the EU, whether it is in the form of the export/import of goods and raw materials, or of services, will benefit from clearer guidance and commentary on the TCA and what is likely to follow. Unfortunately, the Government’s decision to disband the House of Common’s Brexit Committee will drastically reduce the amount of cross party scrutiny of the EU-UK negotiations that lie ahead. Public access to impartial information is not easy, with the press and political commentators often being very divided, and partial, on Brexit. This leaves trade and legal commentators as possibly providing the most reliable scrutiny of the TCA and the further agreements that should flow from it in order to provide what Brexit promised to deliver.

Birketts is pleased to confirm that we will be joined by Professor Catherine Barnard of the University of Cambridge on 28 April 2021. Professor Barnard will explore the intricacies of the TCA, what it delivers for business and what it doesn’t, and what is likely to follow. There will be an opportunity to put questions to Professor Barnard during a Q & A session, and we would invite you to pose any questions you may have in advance when you register for the event. There may also be opportunity to field questions on the day, time permitting. The webinar will take place between 10:30am and 12:00pm.

Book your place.

About the speaker

Professor Catherine Barnard is Professor of European Union Law in the Faculty of Law at the University of Cambridge. Her research interests include European Union law and labour and discrimination law. She has an MA from the University of Cambridge, an LL.M. from the European University Institute, and a PhD from Cambridge. Professor Barnard is a Fellow of Trinity College. She has regularly appeared in front of Parliamentary Select Committees giving evidence on Brexit related matters, as well as briefing government departments about aspect of the withdrawal legislation. She appears regularly in the national media.

The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2021.



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