Summary
The Trade and Cooperation Agreement (TCA), the Withdrawal Agreement and the Windsor Framework underpin the UK’s post-Brexit relationship with the EU.
On 31 December 2020 left the EU, which meant:
- the UK lost all rights and obligations of being an EU Member State
- its nationals and businesses no longer benefit from free movement of people, goods, services and capital
- the UK no longer contributed to the EU budget or benefited from EU funding programmes, policies and international (trade) agreements
From 1 January 2021, the new EU-UK relationship is very different to that of a member state. The TCA comprises a:
- trade agreement for free, fair, sustainable trade, with zero tariffs, zero quotas
- broad economic, social and environmental partnership
- new partnership for citizens’ security
- common governance framework to ensure a sound and lasting partnership
The TCA has provisions to ensure a level playing field (LPF) and respect for fundamental rights. It also confers rights and obligations on the EU and the UK, ‘in full respect of their sovereignty and regulatory autonomy’. In EU terms, the TCA is an ‘Association Agreement’.
Territorial scope
Certain parts apply to the Crown Dependencies, that is the Channel Islands and Isle of Man. However as there are no provisions for the UK’s Overseas Territories, a separate treaty has been negotiated with Gibraltar.
The TCA does not cover Northern Ireland which remains subject to the provisions in the Withdrawal Agreement as refined by the Windsor Framework.
Main changes in EU-UK relations
The European Commission’s information on the deal includes an important comparison with EU membership which highlights the main changes (see figures 16.1 and 16.2).
The TCA allows the UK to negotiate to participate in EU programmes such as Erasmus+ and Horizon. Please see the sections on Higher education and Science and research for more details.
Figure 16.1: Main changes in EU-UK relations (1 of 2)
Figure 16.2: Main changes in EU-UK relations (2 of 2)
Sources:
Richard Barfield, Spotlight on Services, August 2023
Professor Sarah Hall, What does the Brexit trade deal mean for financial services? 27 December 2020
Professor David Bailey, The Brexit trade deal and automotive sector, 28 December 2020
HMG, UK involvement in the EU Space Programme, August 2021
Centre for European Reform, Sophie Besch, A Hitchhiker’s guide to Galileo and Brexit, May 2018
Brookings Institution, Why post-Brexit UK should rejoin the EU’s Erasmus+ exchange program, June 2022
HMG, Independent review of the research, development and innovation (RDI) organisational landscape: final report and recommendations, March 2023
How did the UK get here?
Hemmed in by the UK’s self-imposed red lines, the government said in February 2020, that it would pursue a ‘Canada-style trade agreement’ (i.e. an FTA) but, if it failed to get one, would adopt WTO terms i.e., ‘no deal’. Both would be apart from the provisions of the Withdrawal Agreement which came into force on 1 February 2020.
On 30 December 2020, the UK and EU signed the TCA, which is a basic FTA that applied from 1 January 2021. (For the differences between a basic FTA and ‘no deal’ please go to ‘No deal’.)
The starting point for the negotiations for the UK-EU trade deal was the Political Declaration (PD) attached to the Withdrawal Agreement (WA). The WA itself said nothing about the future UK-EU trading relationship, apart from Norther Ireland and the transition period.
During the WA negotiations, a Northern Ireland backstop featured prominently as a means to avoid a hard border on the island of Ireland. The final WA placed Northern Ireland in the EU Customs Union and simultaneously in a distinct UK customs territory. The WA also committed Northern Ireland to following EU regulations. This created checks between Great Britain and Northern Ireland – the ‘border in the Irish Sea’.
The PD set the direction and aspirations for the UK’s future relationship with the EU, but they were not binding. Briefly, regarding trade, the PD:
- recognised that frictionless UK-EU trade outside the Single Market and Customs Union was impossible;
- reflected additional frictions for UK-EU goods trade compared to the Chequers proposal (please see Appendix F: Chequers White Paper for more details);
- provided limited proposals for services trade;
- left open the extent to which the UK would diverge from EU regulations.