The EU and UK have agreed to create a free trade area meaning no tariffs or quotas on products (customs paperwork will be required), cooperation on regulatory and customs mechanisms as well as provisions to ensure a level playing field for open and fair competition. The Agreement does not govern trade in goods between Northern Ireland and the EU where the Protocol on Ireland and Northern Ireland will apply. A close partnership on citizens’ security and an overarching governance framework has also been agreed.

The EU-UK Trade and Cooperation Agreement covers the following areas:

• trade in goods and in services,
• digital trade,
• intellectual property,
• public procurement,
• aviation and road transport,
• energy,
• fisheries,
• social security coordination,
• law enforcement,
• judicial cooperation in criminal matters,
• thematic cooperation and participation in Union programmes.

Foreign policy, external security and defence cooperation is not covered by the Agreement. In addition, the Agreement does not cover:

• any decisions relating to equivalences for financial services,
• the adequacy of the UK data protection regime,
• the assessment of the UK’s sanitary and phytosanitary regime for the purpose of listing it as a third country allowed to export food products to the EU.

These are unilateral decisions of the EU and are not subject to negotiation.

The Agreement is provisionally applicable since 1 January 2021, after having been agreed by EU and UK negotiators on 24 December 2020. The European Commission proposes to apply the agreement on a provisional basis, for a limited period of time until 28 February 2021. The European Parliament will be asked to give its consent to the Agreement before it can fully enter into force and the European Council must then adopt the decision on the conclusion of the Agreement. The Agreement already passed the UK’s Parliamentary approval process on 30 December 2020.

The EU and the UK agreed to create a joint body, called the Partnership Council, to efficiently manage the Agreement.

The Partnership Council is co-chaired by a Member of the European Commission and a representative of the UK at ministerial level. It meets at least once a year, but can meet more often at the request of either the EU or the UK. Any decision is taken by mutual consent between the EU and the UK.

Documents related to the below items are available on the European Commission website:

• Free Trade Agreement between EU and UK
• a close partnership on citizens’ security
• an overarching governance framework
• Questions & Answers: EU-UK Trade and Cooperation Agreement
• EU-UK Trade and Cooperation Agreement: A new relationship, with big changes – Overview of consequences and benefits
• Consequences for public administrations, businesses and citizens of the EU

UK businesses should visit gov.uk/transition to use the checker tool to quickly identify the actions that UK business needs to take. The checker tool will ask you questions about your business and provide all the information you need to be aware of such as new rules on:

• Importing and Exporting
• Moving goods to and from Northern Ireland including Trader Support Service
• Travelling abroad for work
• Hiring staff from the EU

The Institute will provide further analysis of the Agreement in the next edition of tax.point. For information about how Brexit might affect you, particularly in relation to VAT and Customs, read our latest Brexit Digest.