As the United Kingdom (UK) has officially left the European Union (EU), there has been a lot of discussion about the type of trade agreement that the UK currently has with the EU, and what it might look like in the future. In this article, we will explore the current trade agreement between the UK and the EU, as well as what we can expect in the future.
The Current Trade Agreement
As of January 1, 2021, the UK and the EU have a new trade agreement in place, known as the Trade and Cooperation Agreement (TCA). This agreement was signed just a week before the UK officially left the EU, and it aims to govern the future economic relationship between the UK and the EU.
The TCA covers a wide range of areas, including trade in goods, trade in services, and economic cooperation. Under this agreement, both the UK and the EU have agreed to zero tariffs and zero quotas on all goods, provided that they meet the rules of origin requirements. This means that there will be no tariffs or quotas on goods traded between the UK and the EU, as long as they are deemed to be made primarily in the UK or the EU.
In addition to the zero tariffs and quotas, the TCA also includes provisions on services, investment, and intellectual property. It also includes a dispute resolution mechanism, which allows for disputes to be resolved through an arbitration process.
What Lies Ahead?
While the TCA provides a foundation for the UK-EU trading relationship, there are still a number of issues to be resolved. One of the key issues is the future regulatory relationship between the UK and the EU.
As a member of the EU, the UK was subject to a number of EU regulations, including those relating to product standards and food safety. While the TCA allows for the UK to diverge from EU regulations, it also includes provisions that ensure a level playing field in areas such as labour standards, environmental protection, and state aid.
Another key issue is the future relationship between Northern Ireland (which is part of the UK) and the Republic of Ireland (which is part of the EU). The TCA includes a protocol that aims to prevent a hard border between Northern Ireland and the Republic of Ireland, but there are still concerns about how this will work in practice.
Overall, the TCA provides a framework for the UK-EU trading relationship, but there are still many details to be worked out. As the relationship between the UK and the EU continues to evolve, it will be important to keep an eye on the regulatory and political developments that will shape the future of this important economic partnership.