The UK-EU Trade Agreement: What You Need to Know
After several rounds of intense negotiations, the UK and the EU finally reached a historic trade agreement on December 24, 2020. The agreement, which covers goods and services trade, as well as investment, transport, energy, and fisheries, marks the end of a four-and-a-half-year chapter of uncertainty and tension following the UK`s decision to leave the EU in 2016.
Here are the key points you need to know about the trade agreement:
1. Tariff-free and quota-free trade
Under the agreement, the UK and the EU have secured tariff-free and quota-free trade, meaning that goods traded between the two regions will not have any additional taxes or restrictions imposed on them. This is a significant achievement, as it will prevent potential price increases and supply chain disruptions that could have arisen from a no-deal Brexit.
2. Rules of origin and customs procedures
To benefit from tariff-free trade, the agreement includes rules of origin provisions that require certain conditions to be met to determine whether a product is “made in the UK” or “made in the EU.” The agreement also establishes customs procedures to ensure the smooth flow of goods at the UK-EU borders.
3. Services, investment, and mobility
The agreement includes provisions for the recognition of professional qualifications, facilitating the mobility of professionals between the UK and EU. It also safeguards investment by providing a framework for the protection of investments and allowing for the resolution of disputes. In addition, the agreement provides for continued cooperation in various sectors, from research and innovation to education and culture.
4. Fisheries
The agreement includes a five-and-a-half-year transition period, during which EU fleets will gradually reduce their access to UK waters. After that, the UK will have full control over its waters and will be able to allocate fishing quotas to UK and EU vessels based on the principle of “zonal attachment.”
5. Governance and dispute resolution
The agreement establishes a Joint Partnership Council, which will oversee the implementation of the agreement and take decisions by mutual consent. It also includes a robust dispute resolution mechanism, which will apply if either party considers that the other has breached its obligations under the agreement.
Overall, the UK-EU trade agreement provides a framework for a close economic partnership between the UK and the EU, while respecting the UK`s sovereignty and regulatory autonomy. While some sectors will face new challenges and adjustments, the agreement has brought much-needed clarity and stability to the UK and EU businesses and consumers alike.
