EU-UK: Trade and Cooperation Agreement
On December 30, 2020, the EU and the UK reached a Trade and Cooperation Agreement.
After years of intensive negotiations, the EU and the UK reached an agreement on the terms of the future bilateral relationship after the end of the transition period. This agreement applies on a provisional basis for a limited period of time, from January 1, 2021, until February 28, 2021, before its bilateral adoption.
The agreement consists of three main pillars: 1) a free trade agreement, 2) a new partnership for citizens’ security, and 3) a horizontal agreement on governance.
The Free Trade Agreement provides zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin. In addition to this, the agreement also covers areas such as investment, competition, State aid, tax transparency, air and road transport, energy and sustainability, fisheries, data protection, and social security coordination, among others. On transport, the agreement provides for continued and sustainable air, road, rail and maritime connectivity. It also includes provisions to ensure that competition between EU and UK operators takes place on a level playing field, so that passenger rights, workers' rights and transport safety are not undermined.
The agreement provides binding enforcement and dispute settlement mechanisms, in order to ensure that the rights of businesses, consumers and individuals are respected.
However, the differences between this agreement compared to the EU’s Customs Union and the Single Market are the following:
After years of intensive negotiations, the EU and the UK reached an agreement on the terms of the future bilateral relationship after the end of the transition period. This agreement applies on a provisional basis for a limited period of time, from January 1, 2021, until February 28, 2021, before its bilateral adoption.
The agreement consists of three main pillars: 1) a free trade agreement, 2) a new partnership for citizens’ security, and 3) a horizontal agreement on governance.
The Free Trade Agreement provides zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin. In addition to this, the agreement also covers areas such as investment, competition, State aid, tax transparency, air and road transport, energy and sustainability, fisheries, data protection, and social security coordination, among others. On transport, the agreement provides for continued and sustainable air, road, rail and maritime connectivity. It also includes provisions to ensure that competition between EU and UK operators takes place on a level playing field, so that passenger rights, workers' rights and transport safety are not undermined.
The agreement provides binding enforcement and dispute settlement mechanisms, in order to ensure that the rights of businesses, consumers and individuals are respected.
However, the differences between this agreement compared to the EU’s Customs Union and the Single Market are the following:
- From January 1, 2021, the UK left the EU Single Market and Customs Union, as well as all EU policies and international agreements. The free movement of persons, goods, services and capital between the UK and the EU ended.
- The EU and the UK form two separate markets; two distinct regulatory and legal spaces.
Subject to a financial UK’s contribution to the EU budget, the agreement also enables the UK's continued participation in certain flagship EU programs for 2021-2027 period, such as Horizon Europe.
EU-UK Trade and Cooperation Agreement
EU-UK Trade and Cooperation Agreement
EU-UK Trade and Cooperation Agreement: Council adopts decision on the signing
Signature of the EU-UK agreement, 30 December 2020
Questions & Answers: EU-UK Trade and Cooperation Agreement
UK: New Approach on US Tariffs
On December 8, 2020, the United Kingdom set out its independent approach to trade disputes between the EU and the United States.
The UK will rollover tariffs in response to ‘Section 232’ tariffs imposed by the US on aluminum and steel imports. In addition to this, the Department for International Trade will launch a consultation to ensure these tariffs are in accordance with the UK’s interests.
In parallel, the UK will suspend retaliatory tariffs resulting from the Boeing dispute, imposed by the EU on certain US-origin goods on November 10, 2020 (see previous post). However, the Government of the UK reserves the right to impose tariffs at any point if satisfactory progress towards an agreeable settlement is not made.
Both announcements are part of the Government’s strategy to de-escalate trade tensions and move forward to the next phase of the trading relationship between the UK and the US.
UK announces new approach on US tariffs
The UK will rollover tariffs in response to ‘Section 232’ tariffs imposed by the US on aluminum and steel imports. In addition to this, the Department for International Trade will launch a consultation to ensure these tariffs are in accordance with the UK’s interests.
In parallel, the UK will suspend retaliatory tariffs resulting from the Boeing dispute, imposed by the EU on certain US-origin goods on November 10, 2020 (see previous post). However, the Government of the UK reserves the right to impose tariffs at any point if satisfactory progress towards an agreeable settlement is not made.
Both announcements are part of the Government’s strategy to de-escalate trade tensions and move forward to the next phase of the trading relationship between the UK and the US.
UK announces new approach on US tariffs
UK: Rules of Origin of EU products
On December 29, 2020, the United Kingdom published guidance regarding rules of origin for goods moving between the UK and EU.
This document provides detailed guidance on the rules of origin requirements under the UK-EU Trade and Cooperation Agreement. The guidance explains the most important provisions which both UK and EU businesses need to understand and comply with, in order to ensure that they pay zero tariffs.
The Trade and Cooperation Agreement: detailed guidance on the rules of origin
This document provides detailed guidance on the rules of origin requirements under the UK-EU Trade and Cooperation Agreement. The guidance explains the most important provisions which both UK and EU businesses need to understand and comply with, in order to ensure that they pay zero tariffs.
The Trade and Cooperation Agreement: detailed guidance on the rules of origin
UK-Singapore: Trade Continuity Agreement
On December 10, the United Kingdom and Singapore signed a Continuity Trade Agreement.
Singapore is the UK’s largest trading partner in South-East Asia. Consequently, this continuity agreement will keep the benefits of the existing trading relationship, worth £17.6 billion last year.
Both countries also announced their intention to launch negotiations for a ground-breaking Digital Economy Agreement (DEA). This would be the first DEA that Singapore has struck with a European country. Singapore and the UK are both global leaders in the digital economy and about 70% of UK services exports were delivered remotely to Singapore last year, worth £3.2 billion.
UK-Singapore: Trade Continuity Agreement
Singapore is the UK’s largest trading partner in South-East Asia. Consequently, this continuity agreement will keep the benefits of the existing trading relationship, worth £17.6 billion last year.
Both countries also announced their intention to launch negotiations for a ground-breaking Digital Economy Agreement (DEA). This would be the first DEA that Singapore has struck with a European country. Singapore and the UK are both global leaders in the digital economy and about 70% of UK services exports were delivered remotely to Singapore last year, worth £3.2 billion.
UK-Singapore: Trade Continuity Agreement
UK-Turkey: Trade Deal
On December 29, 2020, the United Kingdom and Turkey signed a trade deal aimed to secure the previous EU-Turkey preferential tariffs.
Both countries committed to start negotiations for a more ambitious free trade agreement in the future, which will go further than the existing deal. The trading relationship between the two countries was worth £18.6 billion in 2019.
UK and Turkey sign trade deal
Both countries committed to start negotiations for a more ambitious free trade agreement in the future, which will go further than the existing deal. The trading relationship between the two countries was worth £18.6 billion in 2019.
UK and Turkey sign trade deal
UK-Vietnam: Free Trade Agreement
On December 11, 2020, the United Kingdom and Vietnam concluded their Free Trade Agreement.
This agreement ensures the continuity of the existing trading relationship through the EU-Vietnam Agreement. Companies can continue to benefit from reduced tariffs on imports and exports, from increased access to services and from the protection of key British and Vietnamese products. This includes 65% of all tariffs that have already been eliminated on UK-Vietnam trade. This will increase to 99% of tariffs by the time of full implementation. The FTA also incorporates clean growth and sustainable development.
This agreement is also a key step towards the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). As a founding member of the group, Vietnam has welcomed the UK’s interest in joining the CPTPP agreement and publicly shown their support for the UK’s accession to the CPTPP in the future. Accession to the CPTPP is a priority for the UK Government, which plans to apply for this in early 2021. CPTPP is one of the most important free trade agreements in the world, accounting for 13% of global GDP in 2019. This would rise to 16% of global GDP if the UK joins the partnership.
Joint statement by the UK and Vietnam
This agreement ensures the continuity of the existing trading relationship through the EU-Vietnam Agreement. Companies can continue to benefit from reduced tariffs on imports and exports, from increased access to services and from the protection of key British and Vietnamese products. This includes 65% of all tariffs that have already been eliminated on UK-Vietnam trade. This will increase to 99% of tariffs by the time of full implementation. The FTA also incorporates clean growth and sustainable development.
This agreement is also a key step towards the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). As a founding member of the group, Vietnam has welcomed the UK’s interest in joining the CPTPP agreement and publicly shown their support for the UK’s accession to the CPTPP in the future. Accession to the CPTPP is a priority for the UK Government, which plans to apply for this in early 2021. CPTPP is one of the most important free trade agreements in the world, accounting for 13% of global GDP in 2019. This would rise to 16% of global GDP if the UK joins the partnership.
Joint statement by the UK and Vietnam