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.
- Enormous disruption to supply chains – these new requirements have resulted in enormous disruption to supply chains, causing significant delay and extra cost and making some exports, for example of perishable food products, unviable. Many Irish hauliers are seeking to avoid crossing the UK land bridge to continental Europe and instead are seeking direct routes by ferry.
- Co-operation going forward – under the TCA, the EU and UK will seek to improve co-operation in the future, for example, by eliminating any unnecessary technical barriers to trade and seeking to simplify customs procedures.
- A complex solution for Northern Ireland – under the Withdrawal Agreement Ireland / 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.