Insight
The EU-UK trade and co-operation agreement: A platform on which to build? by Sam Lowe, 12 January 2021
The new trade deal between the EU and the UK could be improved upon over time, but that is not a given. It could also crumble away. The EU-UK trade and co-operation agreement (TCA) was negotiated in record time, concluding dramatically on Christmas Eve. But in truth, the negotiations could have been wrapped up by the end of the summer, had it not been politically necessary for the EU to fight the good fight over access to UK fishing waters, and for the UK to leave as little time possible for domestic parliamentary scrutiny. The eventual compromises on the contentious issues of level playing field, governance and fish were both predictable and predicted. The TCA’s late arrival left resource-constrained businesses with only days to adjust to new arrangements, but it should be broadly welcomed as a significant improvement over the January 1st default of no trade agreement. The question that now needs answering is not if the agreement can evolve – it can – but rather if it can endure. The TCA removes tariffs and quotas (conditional on the exported products meeting the agreement’s rules of origin criteria) but does little to facilitate trade in services, or negate the need for new bureaucracy and checks at the border. But this was expected – once the UK government prioritised regulatory autonomy, ending freedom of movement, and gaining a free hand on trade policy, its economic ambition was limited to a trade agreement with the EU similar to what the bloc has with Canada and Japan (at least for Great Britain; Northern Ireland has a deeper trade relationship with the bloc under the terms of the Withdrawal Agreement). Importantly, the TCA does include broader co-operation on issues such as law enforcement and social security, although not on foreign policy. One unexpected benefit is that temporary visitors to each other’s territory can retain access to state-provided healthcare, as is current practice among EU countries. Yet, even taking into account the UK’s limited ambition, there are notable gaps and omissions in the agreement. The UK failed to convince the EU to include ambitious provisions on the mutual recognition of professional qualifications or match the UK’s ambition on the temporary movement of services suppliers, particularly intra-corporate transferees. Nor did the EU accept broad-brush mutual recognition CER INSIGHT: The EU-UK trade and co-operation agreement: a platform on which to build? 12 January 2021
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