Mayer Brown is helping companies and organizations worldwide understand, and respond to, the rapidly evolving legal and business implications of the United Kingdom’s decision to leave the European Union.
On December 24, 2020, a UK-EU Trade and Cooperation Agreement (TCA) was announced and applies on a provisional basis from January 1, 2021, until the European Parliament can give its consent.
The Trade and Cooperation Agreement
Setting out the terms of the United Kingdom's future relationship with the European Union, the “eleventh hour” TCA has the status of a binding international treaty. As it is categorized as an “EU only” agreement, full ratification in the national parliaments of the EU-27 will not be required.
The TCA paves the way for significant legal and constitutional change in the United Kingdom. It focuses on trade in goods, criminal judicial cooperation and governance, and contains a number of “level playing field” commitments, as well as specific provisions governing a wide range of areas of economic activity. Crucially, it means there will be no tariffs or quotas on trade in goods between the United Kingdom and the European Union, provided rules of origin are met, although there will still be non-tariff barriers. The TCA will also serve as a foundation for further bilateral agreements and arrangements; it is accompanied by a set of joint declarations relating to areas which have yet to be decided upon, such as financial services regulatory cooperation and the adoption of permanent data adequacy decisions.
A new political body, the UK-EU Partnership Council, will oversee the TCA. The council will meet at least once a year and has the power to adopt decisions amending the agreement in certain circumstances. Its work will be supported by a network of technical committees. The TCA also includes a number of dispute settlement mechanisms involving an independent arbitration tribunal relating to many (but not all) areas of the agreement. Significantly for the United Kingdom, there is no role for the Court of Justice of the European Union, although it will still have jurisdiction over the application of EU rules under the Northern Ireland Protocol.
While there is no reference to EU law in the TCA, EU law as it existed at the end of the transition period (with some limited exceptions) has been transposed into UK law, creating a body of “retained EU law” from which the United Kingdom will be able to diverge over time.
The TCA will be reviewed by the parties every five years and trade discussions between the United Kingdom and European Union are likely to continue for some time to come.
Over the coming months, we will be providing guidance and commentary on issues raised by the United Kingdom's departure from the European Union through legal updates, podcasts and webinars.
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