The UK/EU Trade & Cooperation Agreement: New Rules For Trading With EU After 1 January 2021

Published date29 March 2021
Subject MatterFinance and Banking, Anti-trust/Competition Law, Government, Public Sector, International Law, Privacy, Financial Services, Antitrust, EU Competition , Data Protection, Government Contracts, Procurement & PPP, International Trade & Investment
Law FirmRosenblatt Solicitors
AuthorMr Robert Bell


The UK/EU Trade and Cooperation Agreement (TCA) agreed on 24th December 2020 will usher in big changes as to how UK businesses trade with the European Union as from 1st January 2021.

After that date, the UK left the EU Single Market and the Customs Union, and the UK and EU formed two distinct regulatory, legal and customs territories. Although the TCA provides for zero tariffs and quotas it will grant the UK substantially reduced market access to EU markets in exchange for greater UK autonomy. However as will discuss below this autonomy is not completely unconditional as the EU retains certain rights to remove or modify tariff and quota free access if the UK brings into force "unfair competition" measures which might harm the EU 's economic interests.

The TCA runs to 1,246 pages and took effect provisionally on 1 January 2021 before being fully ratified by the European Parliament and the Council. The UK has already fully ratified the Agreement.

The overall reaction in the UK to the signature of the TCA has been one of relief and the fact that the UK has been spared being plunged into a "No Deal" scenario.

However, the Agreement will create a very different relationship between the UK and the EU. There is likely to be a significant increase to new trade barriers for UK business after the turn of the year with traders facing increased customs documentation, inspections and delays and industries having to replicate regulatory processes for the UK that only previously existed for the EU. Not only that but the restrictions have now been extended to within the UK between Great Britain and Northern Ireland.

In this article we look at the principal provisions of the TCA, highlight what areas it leaves out and what the likely consequences are for businesses trading with Europe.

Institutional Framework

The TCA consists of three main areas: a Free Trade Agreement, a Citizens' Security Partnership and an agreement on Governance. The parties also set up a separate Nuclear Cooperation Agreement and an agreement on Security Procedures for Exchanging and Protecting Classified Information. There is also scope for the parties to enter into additional supplementary agreements covering further areas of cooperation, for example, in the area of the mutual recognition of professional qualifications. This is an indication that for many areas covered by the Agreement this current accord is still very much a work in progress and not in its final form.

The main implementation mechanism will be a "Partnership Council" between the UK and EU which will oversee the matters covered by the Agreement. The Council will meet at least once per year. It also establishes a number of Specialized Committees and Working Groups including on Trade Partnership, Goods, Customs Cooperation, Sanitary and Phytosanitary Measures, Technical Barriers to Trade and others.

There is also an ambitious plan to create a "Parliamentary Partnership Assembly consisting of Members of the European Parliament and of Members of the Parliament of the United Kingdom. This is designed to facilitate an exchange of views on the operation of the TCA.

The TCA is a horizontal agreement between the EU and the UK, and its terms can only be enforced by one party against the other. There is no vertical direct effect. So, unlike the Treaty for the Functioning of the European Union its provisions cannot be enforced by corporate or natural persons against the contracting party in whose territory they are based.

There is also an independent dispute resolution mechanism for the parties to enforce the terms of the deal. There is no role for the European Court of Justice. Initially any disputes are referred for consultation. Both parties will try to resolve the issue informally. Failing resolution of the dispute the complaining party can refer the matter to an independent arbitration tribunal which the TCA will establish. Each contracting party will pick three independent arbitrators jointly. The arbitrators' decision will be binding and delivered in a set timeframe. The tribunal has the power to order a range of remedies from rectification through to the award of compensation and their rulings are binding. If the defaulting party fails to comply the complaining party can suspend various obligations under the TCA. The TCA also provides for an overall review after four years.

It is important to note that there is a special redress mechanism separate from the general dispute mechanism discussed above which applies to the introduction by either party of "unfair competition" measures which are discussed in more detail below.

Free Trade

One of the great success stories of the TCA is the agreement...

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