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UK–EU Trade and Cooperation Agreement

The Institute’s initial analysis of the Brexit deal which governs the UK and EU's future trading and security relationship.

Boris Johnson signs the Trade and Cooperation Agreement
Boris Johnson signs the UK-EU Trade and Cooperation Agreement

On 24 December 2020, the UK and EU agreed a new Trade and Cooperation Agreement[1] to govern the future trading and security relationship now that the UK has left the EU. The 1,200-page text was accompanied by a number of joint declarations, including on co-operation for financial services, subsidy control, asylum and participation in EU programmes, as well as an agreement on the exchange of classified information.

The Trade and Cooperation Agreement is made up of three pillars:

  • A free trade agreement covering the economic and social partnership, including transport, energy and mobility
  • A framework for cooperation between law enforcement and judicial authorities across civil and criminal matters
  • An overarching governance arrangement which will allow for cross-retaliation across different economic areas.

Although the UK wanted some areas to be covered by separate agreements – including on fisheries, energy and security – there will be just one agreement covering the future relationship between the UK and the EU. It will also be supplemented by unilateral decisions taken by both sides, including on financial services equivalence and data adequacy.

This explainer represents the Institute’s initial analysis of the Brexit deal. As we undertake more work, we may update the explainer accordingly.

For a comparison of the two sides’ negotiating mandates, please read our earlier explainer.


  1. For the full text of the agreement, see, Prime Minister's Office, 10 Downing Street, Agreements reached between the United Kingdom of Great Britain and Northern Ireland and the European Union, 24 December 2020.


What does the UK-EU Trade and Cooperation Agreement say about goods?


What does the agreement say?

What does it mean?

Tariffs and quotas

The UK and the EU have agreed that there should be no tariffs or quotas on any goods that qualify. That depends on meeting rules on the amount of local content required which is set out in detailed annexes. Some categories of goods are exempt from rule of origin (RoO) requirements. Manufacturers will be able to ‘cumulate’ – that is, to count both UK and EU parts towards the content threshold of a good.

In some cases, RoO requirements may be loosened for transitional periods or for limited quantities of goods. For example, up to 3,000 tonnes of canned tuna made from non-originating raw tuna may be imported without tariffs. Electric vehicles will be tariff-free if they contain at least 40% originating content until the end of 2023 and at least 45% until the end of 2026.

The two sides have achieved their shared ambition to remove tariffs and quotas on all goods. This goes further than any other EU trade deal with a third country and will prevent additional taxes on products that would have made some UK businesses, in sectors like agriculture and car manufacturing, less competitive. It will also prevent additional costs to UK consumers on EU imports; the UK’s environment secretary had said no deal could have increased food prices by 2%.[1]

However, in order to qualify for tariff-free access, GB goods will need to meet RoO requirements. Some industries, especially food, will simply be unable to do this: cane sugar imported from the Caribbean and refined in the UK will not qualify for access to the EU tariff-free, nor will basmati rice imported from India and milled in the UK. Any meat product must contain only meat from animals born and raised in the UK or the EU.

Other businesses may have to examine their supply chains to check that they meet percentage thresholds for content. For example, cars must contain no more than 45% of materials coming from neither the UK nor the EU. After the transition period ends in 2026, electric cars will not qualify for tariff-free trade if their batteries were imported from outside the UK/EU.

Sanitary and phytosanitary standards

The UK and the EU will maintain separate regimes regulating human, plant and animal health. The agreement places a duty on both sides to ensure that any sanitary and phytosanitary (SPS) border controls are “proportionate to the risks identified”. These will be regularly reviewed by a new Trade Specialised Committee on Sanitary and Phytosanitary Measures to see if further facilitations are available without compromising biosecurity.

The agreement recognises ‘zoning’, allowing imports from pest and disease-free parts of the UK or the EU to continue, in the event of geographically concentrated outbreaks.

The deal also commits to ongoing UK–EU co-operation on animal welfare, antimicrobial resistance and sustainable food systems.

The EU has separately granted the UK ‘national listed status’,[2] allowing trade of live animals and products of animal origin and plants  to continue after the end of the transition period.

However, imports will still need to comply with the respective UK and EU laws in this area. Sanitary and phytosanitary (SPS) border controls involve the most extensive checks, with specialist paperwork and frequent physical inspections required on products of animal origin. This UK–EU deal sets a general aim to keeping the frequency of checks to a minimum but does not remove the need for them. The UK has not achieved its ambition of agreeing an equivalence mechanism for SPS measures, or agreeing a reduced level of checks or fees similar to the EU–New Zealand veterinary agreement where only 1% of goods are subject to SPS checks. This would likely have required the UK to sign up to greater regulatory alignment with the EU in this area. 

This means agri-food traders will incur extra costs on GB–EU trade. EU controls will apply from 1 January, but the UK intends to phase in checks for EU goods entering Great Britain. These checks will also be required on goods moving GB–NI, but the UK and the EU have agreed certain mitigations and ‘grace periods’ through a previous agreement in the UK–EU Joint Committee.

Technical barriers to trade

Both the UK and the EU are obliged to carry out impact assessments of any changes to technical regulations. If one party deviates from international standards, at the request of the other party, it must explain why it has chosen to do so. Each party should also encourage standardising bodies to participate in the development of international standards.

The agreement limits some technical barriers to trade by allowing businesses selling some low-risk products to self-certify that their goods meet the relevant UK or EU standards, in areas where this practice already exists. However, it still permits either party to require other goods be certified by a third party or its own government authority.

The UK and the EU have agreed specific facilitations on medicinal products, motor vehicles, organics, wine, and chemicals to streamline conformity assessment in these sectors.

The agreement establishes the Trade Specialised Committee on Technical Barriers to Trade which will facilitate co-operation in this area.

At the end of the transition period, all goods moving GB–EU will need to demonstrate that they comply with EU law – and vice versa.

The agreement puts a number of measures in place to encourage both parties to minimise technical regulatory divergence, and encourage the use of international standards. This aims to avoid, where possible, businesses trading in the UK and the EU having to comply with two different sets of rules and regulations.

The deal streamlines some compliance processes, removing some of the burdens on businesses, in certain sectors, like organics and chemicals where specific arrangements have been put in place (although the UK will not have access to EU chemicals data – which the chemicals industry believes will cost UK businesses £1 billion in new registration costs). However, the agreement falls short of the broad ‘mutual recognition of conformity assessment’ the UK was asking for, which would have allowed UK bodies to certify that products meet EU standards. This means that many goods will have to undergo two sets of conformity assessments rather than one, adding additional costs and complexity for businesses.

Customs and trade facilitation

The agreement provides for mutual recognition of Trusted Trader Schemes (AEO), allowing for streamlined customs procedures for eligible traders.

The UK and the EU have also agreed to work together and exchange information on customs and VAT matters to prevent fraud and recover unpaid duties.

The deal will not remove the need for customs declarations and paperwork for GB–EU traders, but will allow for simplified forms to minimise the costs and time implications for businesses eligible to use trusted trader schemes (not all businesses will be able, or will choose, to make use of these schemes). The agreement makes no provision for phasing in, so customs formalities will apply to GB goods moving into the EU and Northern Ireland from 1 January. The UK had already announced it would phase in these processes for EU goods over a six-month period.

  1. Hickey S, Environment Sec. confirms food price rise in event of no-deal Brexit, LBC, 6 December 2020,
  2. Department for Environment, Food & Rural Affairs, 'UK secures ‘listed status’ to protect £5 billion animal export market', GOV.UK, press release, 24 December 2020,


What does the UK-EU Trade and Cooperation Agreement say about services?


What does the agreement say?

What does it mean?


The UK and the EU have agreed to make commitments on:

  • market access for services
  • national treatment (prohibiting discrimination between their nationals)
  • local presence (banning parties from requiring a local subsidiary to be set up before services can be provided).

They have also agreed a most-favoured nation clause, which ensures that if either the UK or the EU gives more favourable terms to another country in future, those terms will automatically extend to the UK/EU.

All of these provisions are subject to a long list of exceptions listed in annexes. These vary from one member state to another. Exclusions are in line with those that the EU has made in other FTAs, such as that with Japan (indeed, they would have to be, since the EU–Japan agreement contains a most-favoured nation clause just like the UK–EU one).

Special provisions apply for delivery, telecommunications, and maritime transport services.

Financial services market access is subject to a complete carve-out for prudential measures. The UK and the EU agree in a non-binding declaration to establish a framework for regulatory co-operation.

The parties agree to allow short-term business visits (for example, for discussions on a contract for sale) as well as provision of services, subject to numerous restrictions. For example, independent professionals must possess a degree and six years’ experience to qualify for access, and some sectors still remain closed to them. They may still be required to apply for visas or work permits.

The agreement sets up a framework for the mutual recognition of professional qualifications through the Partnership Council, but no new qualifications will be recognised on day one (the Withdrawal Agreement guarantees the mutual recognition for UK citizens already living in the EU before the end of the transition period, and vice versa).

The general provisions in the agreement sound like they offer very extensive market access, but they are subject to enormous numbers of exceptions in the annexes that vary by sector and member state. UK nationals will not, for example, be able to sell actuarial services in Italy or construction services in Cyprus. They will not be able to be surveyors in Bulgaria or tobacconists in France.

Case study: legal services

While the UK–EU FTA goes further than most EU agreements in its coverage of legal services, member states can still impose total bans on UK lawyers advising on their own law.

Even if they are advising on UK law, they may be subject to particular rules. For example, in the Czech Republic, UK lawyers will have to be resident to provide legal advice, while across the border in Austria they are specifically prohibited from being resident and must provide legal advice on a cross-border basis. Many of the EU’s member states will prohibit UK lawyers from any ownership or control of law firms in their countries.

In some member states, UK lawyers will be able to fly in, provide legal advice, and fly out again without work permits. In others, this will be subject to an economic need test.

Perhaps the most important issue for UK lawyers serving EU clients – whether judgments of UK courts will be enforceable in the EU – is not dealt with in the agreement at all.


Intellectual property, procurement and data

What does the UK-EU Trade and Cooperation Agreement say about intellectual property, procurement and data?


What does the agreement say?

What does it mean?

Intellectual property

The agreement contains provisions to protect intellectual property rights and geographical indicators.


Intellectual property rights

Intellectual property rights will continue to be protected to at least the standards required by the international agreements that the UK and the EU are both parties to, and in many cases to a higher standard.

The agreement covers a broad range of intellectual property rights, such as patents, trademarks, designs, unregistered rights such as copyright, trade secrets and unregistered designs

The UK and the EU will protect the intellectual property rights of each other’s nationals no less favourably than their own.

The agreement includes mechanisms for co-operation and exchange of information on intellectual property issues of mutual interest. 

These provisions are in line with the UK and the EU negotiating mandates, which both called for high standards of protection for intellectual property rights.

Geographical indications

There is no chapter on geographical indications, although the deal explicitly mentions that provisions could be agreed in future.

The UK and the EU can set their own rules on geographical indications, but may decide to agree joint rules for the protection and domestic enforcement of geographical indications in future.

The UK remains bound by its commitments in the Withdrawal Agreement to protect all existing geographical indications protected by the EU (whether from the EU or elsewhere). British names remain protected in the EU provided they comply with the EU registration criteria.. During negotiations, it was reported that the UK had wanted to revisit these commitments. But this has not been achieved. 

Public procurement

The agreement provides some common rules for a transparent and non-discriminatory procurement system, based on the WTO Agreement on Government Procurement (GPA).

The agreement extends the coverage of sectors beyond the WTO agreement including but not limited to hospitality, telecoms, real estate and education.

It sets out basic rules on competitive tendering to ensure that each parties’ suppliers aren’t unfairly excluded from bidding on contracts.

It also sets out requirements for there to be an impartial administrative authority that can assess challenges by suppliers to contract awards.

Public procurement refers to how public sector organisations buy goods, works and services.

The UK’s initial offer was to reaffirm existing commitments in the GPA.

The UK-EU trade agreement builds on the GPA’s rules – but is nonetheless simpler and less prescriptive than EU regulations. It opens up the sectors specified to bids from companies in either territory and ensures that they are not treated differently to domestic bidders.

Data adequacy

Data adequacy is not included in the agreement. Although a joint declaration published alongside the deal makes clear that the EU will undertake an adequacy assessment.

Both sides say they are committed to facilitating cross-border data flows and the deal prohibits either side requiring that data be stored or processed in their territory. 

The deal also specifies that there should be high standards of protection for personal data and privacy.

Other parts of the deal (including on security co-operation, customs co-operation and fishing) also include provisions on data sharing.    

The EU still has to decide whether to deem the UK’s data protection regime adequate, although it is more likely to do this now a deal has been reached.

The EU is unlikely to complete its adequacy assessments in time for the end of the transition period. It has therefore agreed to a temporary arrangement to allow data to continue being transferred from the EU to the UK from 1 January.[1] This will initially last for four months (extendable to six months). This will prevent the need for businesses and law enforcement agencies transferring data from the EU to the UK having to rely on costly and cumbersome alternatives such as standard contractual clauses from 1 January. However, many businesses already spent money preparing to use these fall back arrangements, and the UK government’s advice is that businesses should continue to prepare to use these, in case the EU does not grant adequacy after the temporary bridging period. 

Not having to store or process data in a certain location may prevent businesses having to pay to change where their data is held – although some businesses may have already spent money doing this in anticipation of no deal.


  1. Bodoni S, Temporary Brexit Terms Will Keep EU-U.K. Data Flowing, Bloomberg, 24 December 2020,


What does the UK-EU Trade and Cooperation Agreement say about energy?


What does the agreement say?

What does it mean?


The UK and the EU will each have their own independent energy and climate policies, but will continue to co-operate when it is in their mutual interest to do so. The regulation of each sides’ energy market will be based on some shared principles, including fair competition and non-discrimination.

The UK will continue to access the EU internal energy market. The EU and the UK will have until 2022 to decide how to optimise the use of interconnectors (the physical links that allow for the transfer of electricity across borders).They will explore the option of implicit trading, which authorises interconnector capacity and energy to be sold together.

UK and EU regulators will continue to talk where appropriate. In future, the UK and EU could link their carbon pricing systems.

This part of the agreement will be overseen by the Specialised Committee on Energy. It will apply until 30 June 2026, and from then the two sides will conduct annual negotiations on applying the part.

The UK and Euratom have struck a separate Nuclear Cooperation Agreement. The UK and the EU will be able to continue to transfer nuclear materials and maintain close research co-operation. For example, the UK will participate in Euratom’s Research and Training Programme (2021–25).

Energy co-operation is part of the overall UK–EU Trade and Cooperation Agreement.There is a separate agreement covering nuclear co-operation.

The agreement allows both sides to maintain an independent energy policy, while continuing to co-operate together in areas of mutual interest (nuclear research and maximising the efficient use of interconnectors).

The UK will continue to access the EU internal energy market but in a different way to when it was a member state. The 2022 deadline means the UK and EU will still need to agree the optimal use of interconnectors.

The agreement on energy will end on the same day the adjustment period on fisheries ends.

Energy trade across the island of Ireland is covered in the Northern Ireland protocol.

Level playing field

What does the UK-EU Trade and Cooperation Agreement say about level playing field?


What does the agreement say?

What does it mean?


The agreement sets out definitions of a subsidy (put generally, financial assistance from either party that benefits some businesses over others) and a list of common principles that will inform both sides’ subsidy control systems (for example, that they should only be used to pursue a specific public policy objective).

The agreement also sets out exemptions to the prohibition on providing subsidies – for example, temporary subsidies granted to respond to a national emergency.

On enforcement, the agreement outlines a commitment for each side to maintain a court or tribunal that can try subsidy cases in accordance with each sides’ domestic law. It also specifies common legal remedies for a breach – a court can order a subsidy to be recouped if it has been provided illegally. The UK commits to having an independent authority with “an appropriate role” in the anti-subsidy system.

The agreement contains specific provisions to address any disputes relating to subsidies. If a dispute is not solved by consultation then each party can unilaterally impose “remedial measures” if it assesses a subsidy to have breached the rules. If this happens, there is an option to request that an arbitration tribunal assesses whether the remedial measures taken are ‘necessary and proportionate’. If the arbitration panel finds the remedial measures were not, the party subject to those measures can ask the arbitration panel to determine what compensatory measures it can take in response. These measures could include suspending parts of the agreement – including the provisions on fish.  

The subsidy provisions are weaker than the EU’s initial proposals which were for the UK to align with EU law. But they are stronger than those found in the EU’s free trade agreements with Canada or Japan.

Many of the principles and definitions in the agreement are similar to the EU’s system of state aid. The UK has to include certain features in any subsidy control system it sets up. However, the UK government’s analysis says it will be free to determine the precise role of any independent body so it will not have to approve subsidies in advance, as the European Commission does.

Either side can intervene in each either’s domestic court proceedings if the court permits it to do so. That means a case can be brought through the domestic legal system of each side rather than through arbitration of an expert panel.

Nevertheless, both sides retain the right to impose tariffs if they think there has been a breach. The link to fish is a significant safeguard for the EU. However, any remedial measures are constrained by the requirement that they are proportionate to any alleged breach with an option for retaliation if they are not.

Labour and social standards

Both sides have committed not to lower the overall level of labour and social protection in a way that impacts trade or investment.

This includes fundamental rights at work, occupational health and safety standards and fair working conditions.

Both parties commit to ensure a level of domestic enforcement through monitoring of working conditions and providing legal avenues for disputes.

Both parties also have the right to take countermeasures (impose duties) if they believe any changes by the other party has led to an unfair competitive advantage.

If one party believes the other has made changes to its labour and social standards that would lead to an unfair competitive advantage, it has the right to take countermeasures (which could include imposing duties) however they will attempt to resolve any issues first through consultation.

If such issues are not addressed this way, they can be referred to a panel of experts (three panellists from a pool drawn up by the Trade and Specialised Committee on the Level Playing Field for Open and Fair Competition and Sustainable Development). The findings of the panel are not binding – however, if one party chooses not to comply with them, the other party is able to suspend some obligations under the agreement

Non-regression of labour and social standards is intended to prevent unfair competition. The provisions on arbitration go beyond the EU’s other free trade agreements. The UK’s initial proposals didn’t include any dispute resolution mechanisms for these areas.

However, the commitments not to lower standards are linked to trade and investment. This means that the agreement is focused on the outcome of any future rule changes in labour and social standards in the UK and the EU, as opposed to ensuring the UK and the EU match the other.

The link of the right to take countermeasures to being able to prove the impact of the other party’s rule change could limit how these provisions are used but it could depend how this requirement is interpreted by a panel.

Environment and climate

Both sides have committed not to lower the overall level of environmental protection and climate protection in a way that impacts trade or investment.

The agreement sets out some specific commitments that commit both sides to maintaining planned reduction of greenhouse gases. They also commit to maintaining a system of carbon pricing.

The agreement also outlines common principles on regulating to protect the environment, such as the “polluter pays” principle.

On enforcement, the agreement outlines a commitment for both sides to maintain domestic authorities that can monitor and enforce domestic law with effective remedies. It also commits both sides to maintaining effective legal avenues that can be pursued by an interested party for an alleged violation of domestic law.

If one party believes the other has made changes to its environmental and climate standards that would lead to an unfair competitive advantage, it has  the right to take countermeasures (which could include imposing duties) however they will attempt to resolve any issues first through consultation.

If such issues are not addressed this way, they can be referred to a panel of experts. The findings of the panel are not binding, however if one party chooses not to comply with them, the other party is able to suspend some obligations under the agreement

The commitments on the environment and climate go beyond what is found in other free trade agreements the EU has negotiated. There is greater detail on specific commitments, for example, on carbon pricing, and an attempt to ensure that there is a system of environmental protection informed by detailed common principles.

Nevertheless, they are similar to the labour and social provisions in that they commit both sides to not reducing the level of environmental protection in a way that impacts trade or investment. This focus on impact could limit how these provisions are used (as it won’t be about the rules themselves), but again will be subject to interpretation by the panel.


The agreement sets out common principles and definitions of competition policy. For example, each side should seek to prevent collusion between companies to fix prices or engage in other anti-competitive behaviour that prevents other firms from entering the market.

Each party commits to enforce competition law in their territory and to have an independent competition authority.

Competition authorities on either side may enter into a separate agreement in order to co-operate effectively on cases based on the same or similar transactions.

The commitments are not subject to dispute resolution.

This is similar to what is found in other EU trade agreements, such as with Japan.

Unlike other areas of the level playing field, the commitments are not enforceable through any kind of arbitration. However, they are intended to ensure that each sides’ domestic competition policy is robust.


The agreement sets out a commitment not to lower standards below what has been agreed in the OECD by the end of the transition period.

These standards include requirements for information sharing and rules on preventing aggressive tax planning to exploit differences in two tax jurisdictions.

The requirements are not subject to dispute resolution.

The commitments for taxation do not in any way prohibit the choice to lower or raise taxes. They refer to international standards on preventing tax avoidance.

The commitments are not enforceable and are similar to what is found in other EU free trade agreements.

Rebalancing mechanism

To handle future divergence and to allow the parties to negotiate and update the agreement, there is also a “rebalancing mechanism.”

If there are “significant divergences” in the level playing field that impact trade or investment, either party can impose temporary tariffs to counteract it. However, unless an arbitration panel confirms within 30 days that there has been a breach of the level playing field, the party subjected to tariffs can respond with countermeasures. If the panel finds there has not been a breach, the complainant party must retract the tariffs within five days of the ruling.

After four years, if one party considers that there there have been too many breaches – or if a measure with a material impact on trade and investment has been in place for a year – they can trigger a review of the whole trade pillar of the agreement. In that review, a party can propose amendments to the agreement which, if not resolved after a year of negotiations, can lead to the suspension of the trade parts and other linked parts like transport or, more specifically, aviation.

The rebalancing mechanism is a way for either side to change the baseline standards both sides commit to over time. If one side raises its standards and the other does not, it can impose tariffs, subject to independent assessment.

The inclusion of the four-year review period means that if there were a persistent ongoing issue as a result of future divergence in level playing field, the UK and the EU could end up reverting to WTO terms if the entire trade part of the agreement is suspended.


What does the UK-EU Trade and Cooperation Agreement say about transport?


What does the agreement say?

What does it mean?


The agreement covers air traffic rights and aviation safety.

UK and EU carriers will be able to carry out passenger and cargo flights between the UK and the EU  without any limits on capacity or frequency. EU member states may strike bilateral agreements with the UK for cargo flights to be carried out between the UK, the EU member state, and a third country.

The agreement includes ownership requirements for airlines to benefit from these air traffic rights. UK airlines will qualify if they are majority owned and controlled by UK nationals (although UK airlines operating at the end of the transition period can benefit if they are owned and controlled by UK and/or EU/EEA/EFTA nationals). EU airlines will qualify if they are majority owned by EU/EEA/EFTA nationals. Although both sides have agreed to consider options for greater liberalisation of ownership and control of airlines in future.

Both sides agree  to uphold high levels of consumer protection and will continue to cooperate on security and air traffic management.

On aviation safety, both sides will recognise each other’s certificates and licenses for the purposes of operating air services under the agreement. The agreement also establishes a specialised committee on aviation safety, through which the UK and the EU can agree wider recognition of each other’s certificates, approvals and licenses in areas like airworthiness and pilot training in future.

The agreement is in line with UK and EU mandates. It will allow flights to continue between the UK and the EU without quantitative restrictions. It also ensures modern commercial practices like wet leasing and code sharing can continue.

However, UK airlines will no longer be able to fly between two points in the EU. Many UK airlines operating these services have already set up subsidiaries in the EU to continue these services.

Airline ownership requirements are more flexible than the EU mandate. By allowing existing UK airlines to be owned and controlled by UK and/or EU/EEA/EFTA nationals, the deal removes the need for affected UK airlines to change their ownership structure (although many had already taken steps to do this). However, in future new UK airlines will need to be majority owned and controlled by UK nationals, which is more restrictive than the UK wanted to count as a UK airline for the purposes of this agreement..

The provisions on aviation safety go further than those the EU has in its free trade agreement with Canada, but still means there will be less mutual recognition of safety approvals and certifications on 1 January than under EU membership.

Road haulage

UK and EU hauliers and passenger transport operators will be able to continue operating between and through UK and EU territory without additional permits or licenses.

Hauliers must adhere to certain safety and working standards, including limits on driver hours, rules on professional qualifications, tachographs (speed and distance meters) and vehicle specifications. The deal includes a mechanism to manage regulatory divergence in these areas and a specialised committee to consider the functioning of the agreement.

The agreement is accompanied by a joint declaration that reiterates the need to efficiently manage visa and border arrangements and to facilitate the entry and stay of hauliers.

The agreement is broadly in line with UK and EU mandates, although the provisions on safety and working standards are closer to the EU’s negotiating asks, while the provisions on cabotage are closer to the UK’s. 

The agreement will allow hauliers to continue operating between the UK and EU and to transit through UK or EU territory (which will allow Irish lorries to continue to use Britain as a landbridge to deliver goods to the EU). It also avoids the need for European Conference of Ministers of Transport (ECMT) permits, additional certificates of professional qualification or the sort of unilateral contingency measures announced by the EU in mid-December. The UK may also diverge from EU rules when regulating the domestic road transport industry.

However, hauliers operating between the UK and the EU will face more restrictions on their activities than they do now. For instance, UK hauliers will have weaker cabotage rights; meaning they will be able to make fewer laden journeys (picking up and dropping off goods) within the EU than under EU rules.


UK and EU ships will have access to each other’s ports, port infrastructure and customs facilities on terms no less favourable than those applied to their own vessels.

The agreement also includes provisions which allow UK shipping companies to move empty containers and provide feeder services between ports in an EU member state, subject to authorisation.

The agreement helps to maintain the principle of unrestricted access to international maritime markets


What does the UK-EU Trade and Cooperation Agreement say about mobility?


What does the agreement say?

What does it mean?

Mobility The agreement contains provisions on temporary entry for work purposes, social security co-ordination and mutual recognition of professional qualifications.


Temporary entry for work purposes

Visa-free, short term business trips are permitted between the UK and the EU for specific purposes such as attending meetings, training seminars and trade fairs, purchasing goods or services and taking orders or negotiating the supply of services or goods. However, a number of EU member states have reservations (opt-outs), meaning the activities allowed on short-term business trips can vary between EU countries. Short term business visits are limited to 90 days in any 180-day period (trips for leisure purposes also count towards this total).

Temporary entry for work purposes is also permitted for other purposes (so called mode 4 service provision):

  • Intra-company transfers (movements within a firm lasting up to three years for senior managers and specialists). Intra-company transferees can be accompanied by their partners and dependents.
  • To fulfil a contract to provide services (lasting no longer than 12 months).
  • For self-employed professionals providing services, subject to specific rules.

Within the three categories listed above, there are no market access restrictions (such as economic needs tests and discrimination based on nationality). However, some constraints do apply (for instance, self-employed professionals need to hold a degree and have six years’ worth of experience to be eligible), and a number of EU member states have reservations (opt-outs) – particularly in regulated sectors – which mean additional barriers may apply.

Entry is also permitted for establishment purposes (senior business people setting up an enterprise).

These provisions broadly match those outlined in the UK and EU negotiating mandates.

They mean that UK businesses and individuals will be able to continue to undertake some business activity and deliver some services in the EU (and vice versa) from the end of the transition period, albeit subject to greater restrictions than when the UK was a member of the EU. In many cases, the exact rules will vary between EU member states.

The list of activities permitted on visa-free short term business trips is limited and means that some professionals such as musicians, artists, performers and journalists are unlikely to benefit. Beyond this list, the activities permitted and applicable visa requirements will vary between EU member states. To ensure they comply with new limits on the length of visa-free trips to the EU, individuals will also need to keep track of how long they spend in the bloc (and employers are also likely to keep a record of trips taken by their employees to ensure they know whether their staff are within the time constraints. These changes will create new costs and complexity for businesses. 

Mutual recognition of professional qualifications

There is no mutual recognition of professional qualifications, although the deal provides a route for mutual recognition to be agreed in future.

These provisions fall short of the UK’s negotiating ask and instead follow the precedent set in the EU’s FTA with Canada.

Existing mutual recognition of professional qualifications will end. This means UK professionals will have to comply with professional qualification requirements in each EU member state they want to work in, which could involve having to pass additional professional examinations or a need to demonstrate a certain period of work experience. This will make it harder and more expensive for businesses and professionals to provide services in the EU.

The loss of recognition will have major implications, given the UK has a big surplus in services exports, especially in highly regulated sectors like auditing and accounting subject to professional qualification requirements. 

The agreement sets up a mechanism for qualifications to be recognised in future – but there is no guarantee that any such arrangements will be agreed. For comparison, no qualifications have yet been recognised under the comparable framework in the EU’s FTA with Canada. Even if the framework in the UK–EU deal is more successful, any agreements on recognition are likely to be less comprehensive than those that existed under EU membership.

The UK and individual EU member states may strike bilateral agreements on the mutual recognition of professional qualifications.

The Withdrawal Agreement protects the mutual recognition of professional qualifications for UK citizens living in the EU, or EU citizens in the UK, before the end of the transition period (subject to restrictions). 

Social security

The agreement contains a detailed protocol on social security co-ordination.

UK nationals travelling, working or living in the EU (and vice versa) will retain entitlements to some benefits, including state pensions, healthcare, unemployment benefits and maternity/ paternity benefits. Where eligible, UK nationals will be treated equally to EU nationals (and vice versa).

Cross border workers and employers will only be liable to pay social security contributions in one state at a time and UK and EU member states will be able to take into account contributions paid into each other’s social security systems for relevant periods of work or residence when determining entitlements to state benefits. 

A specialised committee on social security will oversee the application of the social security provisions.

Where the UK or an EU member state is responsible for the healthcare of an individual, they will be entitled to reciprocal healthcare cover akin to that provided by the European Health Insurance Card. This includes short term visitors, categories of cross-border workers and state pensioners who retire to the UK or to the EU.

Until the specialised committee on social security decides that alternative documentation is needed to access reciprocal healthcare rights, existing EHIC cards can be used until their expiry date.

The agreement includes provisions covering exchange of information between social security authorities in the UK and EU member states.

The list of benefits covered is broader than that proposed by the UK (which had limited its ask to state pensions and reciprocal healthcare for tourists and short term business visitors) and is closer to the EU’s negotiating mandate.

These provisions will help facilitate cross-border travel and working by avoiding some of the duplication of social security rules and additional costs that would otherwise have applied.

The exact application of these provisions will vary between member states.

Individuals’ access to healthcare during short-term visits to the EU (and vice versa) was included in UK and EU negotiating asks, but was expected to end at the end of the transition period. This will no longer be the case – and means that in many cases UK nationals travelling to the EU (and vice versa) will continue to have access to state provided healthcare – often for free.

EHIC cards can continue to be used for this purpose until they expire. The UK government has also launched a replacement ‘Global Health Insurance Card’.

Rights to social security outlined in the citizens’ rights provisions of the Withdrawal Agreement continue to apply. 


What does the UK-EU Trade and Cooperation Agreement say about fisheries?


What does the agreement say?

What does it mean?


The UK will no longer be a member of the EU’s Common Fisheries Policy and will be an independent coastal state managing the resources in its waters.

The UK’s share of fishing quotas will increase by 25% of the value of the EU catch in UK waters. This will be phased in, with a gradual reduction of EU quotas in UK waters. EU fishing vessels will continue to have the current level of access to UK waters for an adjustment period of five-and-a-half years.

The agreed quota will set a new baseline for 2026. After the adjustment period, the UK and the EU will conduct annual fisheries negotiations regarding the Total Allowable Catch for shared stocks. These negotiations will also cover access arrangements.

If no agreement is reached, both sides will set a provisional Total Allowable Catch (TAC) corresponding to the level set by the International Council for the Exploration of the Sea. During the application of the provisional TAC the UK and the EU will grant the other provisional access to their fish for three months.

There are arrangements for compensation if the UK or the EU decides not to grant or to reduce access to its waters including suspending or limiting access to waters and ending the preferential tariffs on fishery products. There is also a dispute resolution mechanism if either side breaches its obligations in this part of the agreement. In addition to suspending or limiting access to waters and ending the preferential tariffs on fishery products, either party could also decide to end preferential tariffs on other goods or suspend parts of the agreement. An arbitration process will follow sanctions and assess whether there was a breach and whether the sanctions were proportionate. If either is not the case, they must be removed or altered.

The UK or the EU can terminate the agreement with nine months’ notice, though if the agreement is terminated any obligations will continue until the end of the year. Terminating the fisheries section would automatically terminate the trade, aviation, and road transport sections of the agreement.

A Specialised Committee on Fisheries will be established to provide a forum for the UK and EU to discuss a range of fisheries matters.

There was a clear gulf between the two sides’ mandates, both in terms of access, quota share and stability. It was the final issue to be resolved in the negotiations.

The UK will now be an independent coastal state and the mechanism of ‘relative stability’ that previously governed quota shares, which was deemed unfair by the government, will end. The proportion of fish caught in UK waters by UK vessels will increase, with the share of fishing rights in UK waters given to UK boats increasing from about half to two-thirds.[1] The UK has also maintained tariff- and quota-free access to the EU market in which much of the fish they catch is sold, although this will entail new paperwork and SPS checks. But this market access is closely tied to the EU’s access to UK waters and could be impacted if that is reduced after the five-and-a-half-year transition is up.

The EU has successfully linked the agreement on fish to other aspects of the economic relationship.

The EU quota share has been reduced by less than the UK was initially asking for. Further, the reduction will be phased in over a period of time, allowing the EU to adjust. The EU has announced a €5 billion compensation fund for those affected by Brexit, with fishing communities a likely recipient.



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

EU programmes

What does the UK-EU Trade and Cooperation Agreement say about EU programmes?


What does the agreement say?

What does it mean?

EU programmes

The UK will continue to pay into and participate in some EU funding programmes in areas of mutual interest.

The Joint Declaration on Participation in Union Programmes and Access to Programme Services sets out the draft terms of the UK’s participation in EU programmes. The draft will be submitted to the newly established Specialised Committee on Participation in Union Programmes for discussion and adoption. It gives the UK access to Horizon Europe, the Euratom Research and Training programme, the fusion test facility ITER, Copernicus, and access to the EU’s Satellite Surveillance & Tracking (SST) services.

The UK’s financial contribution will be made up of a participation fee – 4% of the annual operational contribution – and an operational contribution – based on UK GDP. The UK will be reimbursed if its participants are excluded from part of a programme. For example, the UK will not participate in the European Innovation Council Fund, meaning the UK’s annual contribution to Horizon Europe will be adjusted accordingly.

Both the UK and the EU can unilaterally terminate the UK’s participation in EU programmes. The UK can do so with 45 days' notice if the conditions for participation substantially change, their financial contribution increases by 15% or they are excluded from more than 10% of the programme. The EU will initially suspend the UK with 45 days' notice if the UK fails to pay its financial contribution or the conditions that existed when the UK entered change substantially. If the EU has not lifted the suspension and the situation has not been resolved after a year then the UK’s participation in the EU programme will be terminated.

The UK and the EU both reiterate their commitment to the Northern Ireland PEACE+ programme which is subject to a separate financing agreement.

The UK mandate said that it would consider third country participation in EU programmes where it was in the UK’s and the EU’s interests to do so. Scientific research groups, such as The Royal Society, had urged them to participate.

The UK will continue to have access to a number of EU funding programmes. For example, UK science and research will be eligible for funding from the new Horizon Europe scheme – due to run from 2021 to 2027 with a proposed budget of over €80 billion.

The UK will no longer participate in the Erasmus+ scheme, a student exchange programme. But the government has pledged to establish an alternative called the ‘Turing Scheme’. It has pledged £100 million to fund 35,000 placements and exchanges around the world starting in September 2021. Further details on how the scheme will work have not yet been announced.

The Irish government will fund Erasmus+ grants for students in Northern Ireland, at an estimated cost of €2 million per year. No further details have been provided for how this will work in practice.

The European Court of Justice (ECJ) will have a role in resolving disputes involving EU programmes such as Horizon Europe. This is the only part of the agreement where the ECJ has jurisdiction.

Law and justice

What does the UK-EU Trade and Cooperation Agreement say about law and justice?


What does the agreement say?

What does it mean?

Internal security

The UK and the EU have committed to continuing co-operation between law enforcement and judicial authorities.

The UK and the EU will continue to share DNA and fingerprint data through Prüm as well as continuing to transfer Passenger Name Record (PNR) data. The two sides will also be able to share information relevant to operations, including information on wanted or missing persons and objects as well as criminal record information. This will be in response to requests from either the UK or from EU member states and in some cases can be shared proactively. But the UK will no longer have access to certain EU databases which allows for real-time data sharing.

The agreement provides a framework for co-operation with Europol and Eurojust, including data-sharing, which reflects the fact the UK will be a third country. The UK will be able to second liaison officers to Europol (and vice versa) who will be able to attend operational meetings. The UK will also be able to take part in operational analysis projects as well as attend the Europol Heads of Unit meeting as an observer. The UK will be able to second a liaison prosecutor to Eurojust and Eurojust will be able to post a liaison magistrate to the UK. The liaison prosecutor will be able to attend strategic and operational meetings if invited. There will be supplementary agreements directly between the UK and each agency.

The two sides have agreed a new surrender agreement to take the place of the European Arrest Warrant. There are clear provisions relating to how, and under what circumstances, the surrender must take place, including on what grounds a request can be refused. If a member state cannot extradite its own nationals then it needs to bring a domestic proceeding or set out why it won’t do so.

The agreement also includes provisions to ensure mutual legal assistance, which includes a time limit for responding to any requests. There are also obligations on both sides to combat money laundering and terrorist financing and co-operate in this ambition, including sharing relevant information, or confiscating assets, when requested.

The agreement is supplemented by joint declarations relating to PNR, surrender, the exchange of criminal record information and cooperation between law enforcement authorities.

The agreement sets up a Specialised Committee on Law Enforcement and Judicial Cooperation to oversee the functioning of this part of the agreement and the provisions can be reviewed if both sides agree. It will also oversee any disputes. 

The agreement is underpinned by both sides’ commitments to human rights, including the European Convention on Human Rights, as well as provisions to ensure a high level of protection for personal data. This part of the agreement can be terminated almost immediately if the UK or a member state denounce the European Convention on Human Rights or suspended if either side doesn’t sufficiently protect fundamental rights or the rule of law, as well as if a data adequacy decision is reversed.

Both sides wanted to maintain close co-operation in this area – and the agreement largely allows this. It goes further than what many people expected, although does reflect the fact the UK will be a third country outside the Schengen area.

The EU’s concerns about the protection of data and continuing to abide by the European Convention on Human Rights are addressed and the security agreement sits within the overarching governance framework as the EU wanted.

Both sides wanted the UK to maintain access to Prüm and PNR which is reflected in the agreement. But although the agreement contains provisions relating to the sharing of other data, the UK has lost access to EU databases which it originally wanted to maintain. The EU was clear that this would not be possible for a third country. Notably, the UK has lost access to SIS II which allows for real-time sharing of data relating to wanted or missing persons or objects. This database was consulted 600 million times by UK police forces in 2019.

The proposed relationship with Europol and Eurojust guarantees certain operational capability but reflects the fact the UK is a third country.

The agreement on surrender means that the UK and the EU will not have to rely on the much more cumbersome 1957 European Convention on Extradition. It is similar to the EU’s surrender agreement with Norway and Iceland – although that agreement took more than 10 years to negotiate.


What does the UK-EU Trade and Cooperation Agreement say about governance


What does the agreement say?

What does it mean?


The UK and the EU have agreed a governance framework – i.e. an institutional framework to manage the relationship and resolve any disputes. The agreement will be overseen by a Partnership Council, co-chaired by a member of the European Commission and a UK minister. Numerous specialised committees and working groups are also established relating to specific parts of the agreement.

There will be no role for the European Court of Justice in resolving disputes.

There are three stages to the general dispute resolution procedure:

  1. Consultations: The UK and the EU will first try to resolve disputes diplomatically through consultation in the Partnership Council.
  2. Arbitration: If they cannot resolve their dispute amicably, they can refer most disputes to an independent arbitration tribunal (which will be convened for each dispute), which will have up to 160 days to issue a ruling.
  3. Compliance: If the offending party fails to comply with the ruling, the other party can suspend parts of the UK–EU Trade and Cooperation Agreement. Suspension can target other areas of the agreement (with some exceptions). This is called cross-retaliation.

Not all of the agreement is subject to the general dispute resolution procedure. Instead, there are specific dispute resolution procedures in areas such as law and justice co-operationfisheries, as well as many areas of the level playing field, including subsidies, labour and social standards, and environment and climate standards.

Other parts of the agreement – such as those covering competition, tax, SMEs and return of cultural property – do not have formal dispute resolution procedures. Issues in these areas are likely to be resolved through informal political dialogue.

As a general rule, disputes can only be resolved using the mechanisms provided for in the agreement. However, in exceptional cases, the UK and the EU can refer disputes to other international tribunals, for example the World Trade Organization Appellate Body. This is the case if there is a breach in an area of UK–EU agreement that would also constitute a breach under other international agreements the UK and EU have both signed up to, like GATT/GATS.

Any serious breach of the commitments on climate change, non-proliferation of weapons of mass destruction and respect for democratic values and fundamental rights can lead to the immediate suspension of part or the whole agreement.

From the end of 2024, the Partnership Council may review whether the agreement delivers the appropriate balance of rights or obligations on trade and modify terms of the agreement. The entire agreement will be reviewed on a five-yearly basis.


The UK and the EU have agreed an institutional framework that will govern the whole agreement. This was an EU ask – the UK wanted separate mechanisms.

In most cases, the UK and the EU will first try to resolve disputes diplomatically in a new UK–EU joint committee (called the Partnership Council) or other committees outlined in the agreement. If they cannot resolve their disputes consensually, they can refer most disputes to an independent arbitration panel.

Failure to enforce joint commitments or rectify a breach can lead to suspension of part of the agreement or the use of other trade remedies, like the re-imposition of tariffs.

If either party believes the other has breached the level playing field commitments, the dispute resolution rules governing these provisions generally allow the complaining party to take quick unilateral remedial measures, albeit subject to review by an arbitration panel or panel of experts.

Substantial breaches of matters deemed ‘essential’ to the agreement, including respect of the rule of law and commitments on climate change, could lead to the suspension of the whole agreement.

There is no role for the European Court of Justice – a key ask from the UK, except for the narrow area of UK participation in EU research programmes. However, the ECJ will still have jurisdiction with respect to the application of EU rules under the Northern Ireland protocol.

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