Brexit 2021: Trade and Cooperation Agreement concluded between the EU and the UK

The European Union (EU) and the United Kingdom (UK) have agreed a Trade and Cooperation Agreement which took effect from 1 January 2021. 

What are the key takeaways for business?

  • The EU and the UK have agreed a trade and cooperation agreement.
  • The Agreement will not be the last Brexit agreement – there will be others so Brexit is not complete.
  • It provides for zero tariffs and no quotas for goods meeting the "rules of origin" regime in the Agreement.
  • It is more than a trade agreement: it provides for cooperation between the parties on a variety of issues.
  • Some services are covered by the Agreement but not financial services – it is hoped that progress will be made on this sector by Spring 2021 but progress will be difficult.
  • Transport connectivity is maintained to some extent but UK operators no longer have full access to the EU's internal transport market.
  • Control over fishing in UK waters (which is currently shared by the EU and the UK) is being gradually handed over to the UK.
  • The Agreement facilitates investment in each territory by nationals and businesses from the other party to some extent but we could see some obstacles to investment (particularly investment in the UK by EU nationals and businesses).
  • The parties are committed to high levels of protection/standards in key areas such as environmental protection, the fight against climate change and carbon pricing, social and labour rights, tax transparency and State aid.
  • There are provisions on State aid which binds both sides – this is to avoid the "race to the bottom" – this area could prove controversial with "State aid"/trade clashes occurring between the EU and the UK in the future.
  • There is a dispute resolution mechanism for settling disputes between the EU and the UK – this includes a new Partnership Council.
  • It is worth recalling that the Agreement is not a permanent regime because either side may terminate it on 12 months' notice which would bring us back to what would be, in practical terms, a "no deal Brexit".

A&L Goodbody's team of specialist Brexit lawyers has analysed the implications of the 1,200+ page legal instrument and are available to advise on any aspect of the new regime. There will be also further updates on this specialist Brexit hub. In the interim, do not hesitate to contact your usual ALG contact for further information on the developments.

Date published: 7 January 2021