The EU-UK Trade and Cooperation Agreement1 (the Agreement) received royal assent in the UK on 31 December 2020. It has also received provisional authorisation from the EU, with formal ratification to follow in early 2021.
Much of the free trade in goods between the UK and the EU has been maintained, with the reintroduction of customs declarations for shipments between the UK and EU. Free movement of services, people and capital will be the subject of later discussions and contingent on how far the UK and the EU diverge from present standards.
Practical cooperation issues in aviation, road, rail and maritime transport, energy, data and cybersecurity have been included to ensure that businesses can continue to operate on a cross-border basis.
The focus therefore now shifts to the trade in services, which comprises 80 per cent of bilateral trade, and how the rules relating to services will be drawn up and applied in the coming years.
The Agreement is for an initial term of five years, and so is likely to be reviewed and updated in accordance with the EU’s political terms calendar, which also works on a five-year cycle.
Separate provisions apply for trade between the EU and Northern Ireland, to which the 2019 Withdrawal Agreement2 applies, and between Gibraltar and the EU, which is subject to a separate agreement between Gibraltar and Spain.
The UK voted to leave the European Union in a referendum on 23 June 2016. Notice of its intention to leave was formally triggered on 29 March 2017, in accordance with article 50 of the Treaty on European Union.
After some extensions, the UK left on 31 January 2020, but with a transition, or implementation, period which expired at 11pm GMT on 31 December 2020. During that period, formal negotiations on a future agreement between the UK and EU took place.
The EU-UK Trade and Cooperation Agreement was agreed on 24 December 2020 and has been signed by the UK and received royal assent on 31 December 2020. It has been signed by the EU and applies provisionally from 1 January 2021 until 28 February 2021, by which time it is expected to have been ratified by the European Parliament.