Documents to download

Note: This briefing was prepared specfically for the recall of Parliament on 30 December 2020 to consider the legislation necessary for the implementation of the Trade and Cooperation Agreement (TCA) announced on 24 December. The briefing contains references to the Article numbering in the provisional version of the TCA text published on 26 December. The Article numbering was subsequently revised in the final legally scrubbed and authenticated version of the text that was fully applied by the UK and EU from 1 May 2021.

This briefing will not be updated. For a table charting the final agreement article numbering against the provisional numbering see the spreadsheet published alongside the revised Library briefing on the TCA governance and dispute settlement provisions. Further briefings on specific aspects of the TCA can be found on the Library landing page for the post-Brexit relationship. 

With a week to go until the end of the Brexit transition period, the UK and EU announced the Trade and Cooperation Agreement (TCA) on 24 December. The deal will cover the future UK-EU relationship, with the two parties aiming to implement it in time for the end of the Brexit transition period on 31 December. Alongside the TCA, the UK and EU also agreed the Nuclear Cooperation Agreement (NCA) and the Security of Classified Information Agreement (SCIA).

Implementing the Trade and Cooperation Agreement

On the UK side, the Government published the European Union (Future Relationship) Bill on 29 December. The purpose of the Bill is to implement the provisions of the TCA, NCA and SCIA in domestic law.

Parts 1 and 2 of the Bill implement specific parts of the agreements, including on security, trade, transport and social security. It does this by amending parts of UK law, creating powers to make regulations and, in the case of social security, incorporating parts of the TCA directly into UK law.

Part 3 of the Bill covers general implementation. It has two key components. First, it creates broad powers for the UK Government and devolved authorities to make regulations to implement the agreements. These regulations can do anything that primary legislation can do, subject to certain limitations (Henry VIII powers). Second, to the extent that the Government or devolved authorities have not taken steps to implement the agreements, there is a general provision that says all existing domestic law is modified to ensure the UK is complying with its obligations under the TCA and SCIA. While the modifications will not appear in the text of the law, the courts will need to treat the law as if it has been amended. This does not apply to domestic laws enacted or made after the agreements become provisionally applied.

Finally, the Bill disapplies the relevant provisions of the Constitutional Reform and Governance Act 2010 for the TCA, NCA and SCIA. This normally provides that a treaty cannot be ratified until it has been laid before Parliament and 21 sitting days have passed.

Parliament has been recalled on 30 December to approve the legislation. The Bill is scheduled to go through all of its Commons and Lords stages before 31 December so that, if passed, it can receive Royal Assent before the end of the transition period.

On the EU side, the TCA will require unanimous approval in the Council of the EU (Member State Government representatives) and European Parliament consent prior to ratification. There is not enough time for the European Parliament to scrutinise and approve the TCA before the end of the year. However, the European Commission proposed provisional application of the TCA prior to ratification.

The Council of the EU approved provisional application on 29 December. The European Commission proposal for ratification initially envisaged a Parliament consent vote prior to conclusion of the Agreement by the end of February 2021. However, the European Parliament is considering a longer period of scrutiny with a consent vote in March.

The Trade and Cooperation Agreement: key points

Key features of the TCA include the following:

  • Trade: There will be no tariffs or quotas on trade in goods provided rules of origin are met. There are increased non-tariff barriers, but measures on customs and trade facilitation to ease these.
  • Governance: The Agreement is overseen by a UK-EU Partnership Council supported by other committees. There are binding enforcement and dispute settlement mechanisms covering most of the economic partnership, involving an independent arbitration tribunal. There is no role for the Court of Justice of the EU in the governance and dispute settlement provisions. 
  • Both parties can engage in cross-sector retaliation in case of non-compliance with arbitration rulings (through suspension of obligations, including imposition of tariffs). This cross-sector retaliation applies across the economic partnership.
  • Level playing field provisions: Both parties have the right to take counter-measures including imposition of tariffs, subject to arbitration, where they believe divergences are distorting trade. There is also a review mechanism where this occurs frequently.
  • Subsidies/state aid: Both parties are required to have an effective system of subsidy control with independent oversight. Either party can impose remedial measures if a dispute is not resolved by consultation.
  • Fisheries: 25% of the EU’s fisheries quota in UK waters will be transferred to the UK over a period of five years. After this, there will be annual discussions on fisheries opportunities. Either party will be able to impose tariffs on fisheries where one side reduces or withdraws access to its waters without agreement. A party can suspend access to waters or other trade provisions where the other party is in breach of the fisheries provisions.
  • Security: A new security partnership provides for data sharing and policing and judicial co-operation, but with reduced access to EU databases. A new surrender agreement takes the place of the European Arrest Warrant. Cooperation can be suspended by either side swiftly in the case of the UK or a Member State no longer adhering to the European Convention of Human Rights
  • EU Programmes: Continued UK participation in some EU programmes: Horizon Europe (Research), Euratom Research and Training, ITER fusion and Copernicus (satellite system).
  • Review and Termination: The TCA will be reviewed every five years. It can be terminated by either side with 12 months’ notice, and more swiftly on human rights and rule of law grounds.

Further reading

The Agreement

The UK Government has published a summary explainer, alongside the full text of the agreement (and additional agreements).

The European Commission has published a set of explanatory materials, including a Q&A

Institute for Government summary of the agreement

UK in a Changing Europe commentary

Scottish Parliament Information Centre summary of the agreement

Initial analysis from Institute for Public Policy Research

Collection of Twitter threads from different experts

Politico, 10 key details in the UK-EU trade deal, 27 December 2020

Financial Times, Brexit trade deal explained: the key parts of the landmark agreement, 25 December 2020

Impact on sectors

Fusacchia, Luca Salvatici and L. Alan Winters, The Costs of Brexit, UK Trade Policy Observatory, University of Sussex, Briefing Paper 51, December 2020

EY, Explainer: What the Brexit deal means for business

George Peretz, The subsidy control provisions of the UK-EU trade and cooperation agreement: a framework for a new UK domestic subsidy regime, 28 December 2020

UK in a Changing Europe, What does the trade deal mean for fisheries?, 27 December 2020

BBC Reality Check, Will the EHIC still be valid after Brexit?, 28 December 2020

Nuffield Trust, Brexit deal reduces uncertainty for health and care but major difficulties remain, 24 December 2020

Negotiations and end of transition

For an overview of the UK-EU negotiations see Commons Library Briefing paper 9101 The UK-EU trade and co-operation agreement: the path to the deal. See also Commons Library papers on the UK-EU future relationship negotiations covering different sectors and Library briefings on the end of the transition period, what a potential deal might cover and the impact of not having a deal.

Documents to download

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