Following months of arduous negotiations, on 24 December 2020, the European Union (EU) and the United Kingdom (UK) reached a Trade and Cooperation Agreement to govern relations between the two parties as from 1 January 2021.
The Trade and Cooperation Agreement is a lengthy and complex text with content that can be divided into four main sections: the first on free trade, which eliminates the quotas and customs duties between the UK and the EU and which establishes a text on the Level Playing Field - or conditions for fair competition, one of the greatest demands of the EU during the negotiations. The second section establishes a framework for economic, social, environmental and fishing cooperation, which contains provisions aimed at ensuring energy connectivity and on transport, together with coordination in areas related to social security. The third section regulates an association on internal security based on such existing mechanisms as Europol and Eurojust and including provisions on the handover of detainees, the fight against money laundering and the financing of terrorism. Lastly, a fourth section establishes a common governance framework based on an institutional framework that has an "Association Council", co-chaired by a member of the European Commission and by a representative of the British Government at a ministerial level, who will supervise the application of the Agreement and will be assisted by Specialised Committees and Working Groups.
The European Union and the United Kingdom will constitute two separate markets and two different regulatory and legal spaces. This will create obstacles in both directions to the trade of goods and services, as well as to mobility and cross-border exchanges.
The European Commission has prepared a Q&A document on the new Trade and Cooperation Agreement.
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