The EU–UK Trade and Cooperation Agreement (TCA) is a free trade agreement signed on 30 December 2020, between the European Union (EU), the European Atomic Energy Community (Euratom), and the United Kingdom (UK). It provisionally applied from 1 January 2021, when the Brexit transition period ended, before formally entering into force on 1 May 2021, after the ratification processes on both sides were completed: the UK Parliament ratified on 30 December 2020; the European Parliament and the Council of the European Union ratified in late April 2021.
The agreement, which governs the relationship between the EU and the UK after Brexit, was concluded after eight months of negotiations. It provides for free trade in goods and limited mutual market access in services, as well as for cooperation mechanisms in a range of policy areas, transitional provisions about EU access to UK fisheries, and UK participation in some EU programmes. Compared to the UK's previous status as an EU member state, on 1 January 2021 the following ended as they are not incorporated in the TCA or the Brexit withdrawal agreement: free movement of persons between the parties; UK membership in the European Single Market and Customs Union; UK participation in most EU programmes; part of EU–UK law enforcement and security cooperation such as the access to real time crime data; defense and foreign policy cooperation; and the authority of the European Court of Justice in dispute settlement (except with respect to the Northern Ireland Protocol).
In addition, two other separate treaties were negotiated, signed, and ratified in parallel around the same time by the UK and the EU/Euratom: an agreement on exchange of classified information and another on cooperation in the field of nuclear energy.
Background
The UK became a member of the European Communities in 1973, which later became the EU and Euratom. Since then, the UK contributed to making and was subject to EU law, whose application was governed by the European Court of Justice.
After the UK decided in a 2016 referendum to leave the EU ("Brexit"), it did so on 31 January 2020. Until 31 December 2020, a transition period applied, in which the UK was still considered for most matters to be part of the EU. After the first negotiations between the UK and the EU led to the Brexit withdrawal agreement that implemented the UK's withdrawal, negotiations commenced for an agreement to govern trade and other relations between the EU and the UK after the end of the transition period.
Negotiations
The UK government led by Boris Johnson pursued a desire to trade freely with the EU while being subject to as few EU rules as possible, and especially not to the jurisdiction of the European Court of Justice. For its part, the EU insisted that the price for UK access to the European Single Market was compliance with EU subsidies, social, environmental and other regulations to avoid distorting competition in the single market. Another major point of contention was fisheries. Part of the impetus for Brexit was the British desire to regain full control over their fishing waters, whereas EU coastal states demanded to retain all or most of the fishing rights they enjoyed under the EU's Common Fisheries Policy.
The trade agreement, negotiated under increasing time pressure due to the end of the transition period on 31 December 2020, had to address all of these issues. Formal trade negotiations, in which Michel Barnier represented the EU and David Frost represented the UK, began on 31 March 2020. They were originally due to be concluded by the end of October 2020. However, negotiations continued and formally ended on 24 December 2020 when an agreement was reached in principle after ten negotiating rounds.
Signature, ratification and entry into force
Signature After approval by the Council of the European Union on 29 December, the President of the European Council Charles Michel and the President of the European Commission Ursula von der Leyen signed the TCA on 30 December 2020 on behalf of the EU. The agreement was then flown to London and signed for the UK by the Prime Minister, Boris Johnson.
Ratification The internal procedures of the UK and EU/Euratom had to be followed for ratification after signature. For the EU, this meant a decision by the Council of the European Union after receiving the consent of the European Parliament. As the TCA was not treated as a mixed agreement, no national ratification procedures were needed in the member states.
For the UK, ratification is a royal prerogative, exercised in effect by the Government. For the agreement to have effect in UK domestic law and to enable the government to enter into the agreement, the enactment of the European Union (Future Relationship) Bill was required. The bill was introduced in Parliament on 30 December 2020 and provides for implementation of the TCA. The same day, the bill passed the House of Commons with 521 votes to 73, and was approved by the House of Lords. It became the European Union (Future Relationship) Act 2020 when it received royal assent on 31 December 2020.
On 4 March 2021, the European Parliament postponed its consent decision, which had been planned for 25 March. The EU accused the UK of proposing for a second time to break international law, after UK ministers announced the unilateral extension of the grace period on certain checks on trade from Great Britain to Northern Ireland. On 27 April, the European Parliament gave its consent to the agreement after a plenary vote (660 in favour, 5 against, 32 abstentions). The Council of the European Union approved the agreement by a decision on 29 April using a written procedure.
Versions Agreement on the draft text of the TCA was only reached in late December 2020, while the parties planned provisional application on 1 January 2021. The parties therefore signed the draft text, of which the articles had not been continuously numbered and which was subject to legal revision before it could enter into force. The draft agreement was replaced by the definitive version of the agreement through an exchange of notes on 21 April 2021, and this version applies retroactively () from 1 January 2021.
Provisional application and entry into force The agreement was provisionally applied from 1 January 2021 until its entry into force on 1 May 2021. The ultimate date for the end of the provisional application was extended from 28 February to 30 April 2021.Article FinProv.11 in the draft. The Council decision on the signing included the approval of provisional application, provided the UK also decided to provisionally apply the document. The agreement entered into force on the first day of the month after ratification by both parties (Article 783; Article FINPROV.11 in the draft), namely 1 May 2021.
Territorial scope The agreement applies to the territory of the UK and to the EU. It does not apply to Gibraltar, which was also part of the EU, but for which a separate negotiation is conducted between the UK, Spain and the EU. The agreement applies to the Isle of Man, Bailiwick of Guernsey and Bailiwick of Jersey (which gave their consent) with regard to trade in goods and fishing. With regard to Northern Ireland, the provisions on trade in goods do not apply, as those (as well as provisions on application of EU law in that area and involvement of the European Court of Justice) are governed by a protocol to the Brexit withdrawal agreement.
Contents The 1,246-page agreement (including annexes) covers its general objectives and framework with detailed provisions for fisheries, social security, trade, transport, visas; and cooperation in judicial, law enforcement, and security matters. Other provisions include continued participation in community programmes and mechanisms for dispute resolution. ()
According to summaries of the agreement published by the European Commission and the UK government, the agreement provides for the following or has the following effects on the EU–UK relationship compared to when the UK was an EU member state. For Northern Ireland other arrangements may be in place through the Ireland/Northern Ireland Protocol.
Trade in goods Trade in goods between the EU and UK shall not be subject to any tariffs or quotas. Traders can self-certify compliance with agreed rules of origin. However, as a result of the UK leaving the EU customs area, customs formalities are required between the two parties, and VAT and certain other duties apply upon import. There are provisions intended to limit technical barriers to trade (TBT), building on the WTO TBT Agreement.
Trade in services Building on WTO rules, each party is to treat service providers of the other party no less favourably than its own. There are rules to facilitate the cross-border provision of services in certain fields, such as digital services (including as regards data protection rules), public procurement (extending the coverage of the WTO GPA somewhat), business trips and secondments of highly qualified employees. But there is no longer general access to each other's services markets; for example, financial services providers no longer have access to customers via "passporting". Professional qualifications are no longer automatically mutually recognized.
Energy, public policy and other aspects of trade With respect to energy, there is to be regulatory and technical cooperation, as well as a reconfirmation of the Paris Agreement climate goals. But the UK is no longer part of the EU energy market and emissions trading scheme. The UK has concluded a separate agreement with Euratom on peaceful cooperation on nuclear technology, which has not entered into force.
While both parties remain free to shape their public policy in the fields of subsidies, labour and social policy, or climate and environment policy, the agreement provides for "level playing field" principles and mechanisms that aim to prevent a distortion of trade as a result of measures in these fields. In particular, each party may take countermeasures (subject to arbitration) against damaging measures by the other party.
Certain existing intellectual property provisions exceeding TRIPS commitments (including a 70-year copyright term) are to be preserved in the EU and the UK. There are agreed rules on geographical indications existing before Brexit which are confirmed in the TCA (Article IP.57), but not for Indications registered afterwards, except for Northern Ireland.
Movement of persons There is no free movement of persons between the EU and the UK. Visitors planning stays of more than 90 days in any 180-day period need a visa; those planning any work other than routine business meetings and conferences need an appropriate visa. There is coordination of some social security benefits.
Aviation and road transport In aviation, EU and UK carriers continue to enjoy access to point-to-point traffic between EU and UK airports (third and fourth freedoms of the air). But they no longer have access to each other's aviation markets otherwise, including with respect to domestic flights or flights connecting to other countries. The UK is free to negotiate "fifth freedom traffic rights" for cargo flights (e.g. the London–Paris–Barcelona route for a UK carrier) with the member states of the EU individually.Article AIRTRN.3 in the draft. There is cooperation on aviation safety, but the UK no longer participates in EASA.
Likewise, in road transport, mutual market access for passenger transport is limited to point-to-point crossborder transports, whereas for the transport of goods up to two extra movements (cabotage) in the other party's territory are permitted.
Fisheries