Eu Uk Trade Agreement Explained

The European Union (EU) and the United Kingdom (UK) trade agreement has been a hot topic since the UK officially left the EU on January 31, 2020. The negotiations between the two parties have been ongoing since then, and they finally reached an agreement on December 24, 2020, just a week before the end of the transition period. In this article, we will explain the key features of the EU-UK trade agreement.

Firstly, it’s important to note that this agreement only covers the economic aspects of the EU-UK relationship. It does not cover issues such as security or foreign policy. The main objective of the agreement is to ensure that there are no tariffs or quotas on goods traded between the EU and the UK. This means that businesses can continue to trade without paying additional taxes or facing customs checks.

However, it’s not a completely ‘free’ trade agreement. There are rules of origin that need to be followed in order for goods to qualify for zero tariffs. This means that goods must be made in the EU or the UK, or have a certain percentage of their value added in either territory. Additionally, there are also regulations on standards and regulations, such as environmental and labor standards, that businesses must adhere to.

The agreement also includes a dispute resolution mechanism. If either party believes that the other is not complying with the terms of the agreement, they can refer the issue to be resolved through independent arbitration. This mechanism aims to provide a quick and efficient way to resolve disputes.

In terms of trade in services, the agreement is more limited. While there are provisions for continued market access in certain sectors such as professional services and telecommunications, there is no agreement on financial services. This means that the UK’s financial sector will have limited access to the EU market, and vice versa.

Another important aspect of the agreement is the Northern Ireland Protocol. This is a separate agreement that’s part of the overall EU-UK trade agreement and aims to avoid a hard border between Northern Ireland, which is part of the UK, and the Republic of Ireland, which is part of the EU. The Protocol means that Northern Ireland will continue to follow certain EU rules and regulations to avoid the need for border checks.

In conclusion, the EU-UK trade agreement is a complex agreement that covers various aspects of trade between the EU and the UK. While it ensures that businesses can continue to trade without tariffs or quotas, it also includes important provisions on rules of origin, standards and regulations, and dispute resolution. However, it’s not a completely ‘free’ trade agreement, and certain sectors such as financial services have limited access to the EU market.