The EU-UK Trade and Cooperation Agreement of December 2020 (the TCA) has a significant impact on the import and export of goods. From 1 January 2021 onwards:
- Free trade agreement – the TCA provides that goods may be traded freely between the EU and the UK, with no customs duties or quotas. However, in practice, imports and exports of goods between the EU and UK is significantly more complex than when the UK was part of the EU Single Market and Customs Union. The reasons for this include:
• Rules of origin – only goods which originate in the EU or UK benefit from the free trade agreement. Goods which do not satisfy the detailed rules of origin may be subject to tariffs. Complexity arises where products incorporate non-originating materials; or where EU originating products are exported to the UK and then re-imported into the EU. For example, if UK grocery retailers import fruit from Mediterranean EU countries, package it in the UK and then dispatch it to stores across the UK and Ireland, product dispatched to Ireland will incur tariffs.
• SPS – the EU and UK will continue to operate separate sanitary and phytosanitary (SPS) regimes. SPS measures are measures to ensure that food is safe. This means that exporters of agri-food products must produce veterinary declarations.
• Technical regulations and standards – the EU and UK will continue to operate separate regulatory regimes for product safety and conformity assessment procedures; this means that any goods traded must demonstrate compliance with the regime of the destination market.
- EU-UK co-operation – the TCA established an EU-UK Partnership Council, supported by a long list of Specialised Committees, to progress EU-UK co-operation going forward. Key areas identified as requiring improvement include the SPS regime, the VAT regimes and the UK's proposed safety & quality marking scheme (to replace EU CE marks).
- A complex solution for Northern Ireland – under the Withdrawal Agreement Northern Ireland Protocol, Northern Ireland is treated as part of the EU Single Market and Customs Union. This means that there are no controls on goods crossing the border between Ireland and Northern Ireland. However, there are controls on goods moving between Northern Ireland and the other parts of the UK. There has been considerable friction between the EU and the UK over the implementation of the Northern Ireland Protocol. The EU considers that the EU is not complying with the agreed arrangements. The UK is seeking a reduction in the arrangements, arguing that they are unworkable for the UK.