The Trade and Cooperation Agreement negotiated by the EU and the United Kingdom entered into force provisionally on 1 January 2021 after all 27 member states approved the Agreement and its provisional application. On 27 April 2021, the European Parliament also voiced its approval meaning the Agreement was able to enter into force fully on 1 May 2021.
The Trade and Cooperation Agreement places the relationship between the EU and the United Kingdom on a new footing. This is a great success. Never before has such a comprehensive agreement been concluded between the EU and a third country, and it has been achieved in record time.
Both sides, the EU and the UK, benefit from the Agreement reached. Not just for the European Union but also for Germany, intensive cooperation and close friendly relations with the United Kingdom are essential, as the German Bundestag also underscored in a position issued on 21 April 2021. The Trade and Cooperation Agreement forms an excellent basis here. The Bundesrat also emphasised in its position dated 12 February 2021 that the Agreement provides a long-term legal framework giving all those affected by Brexit a basis on which to plan.
What arrangements have been agreed?
Among other things, the Trade and Cooperation Agreement creates a broad economic partnership. In essence, this is based on a free trade agreement which contains neither tariffs nor quotas and thus averts any major trade barriers. However, such a partnership needs fair parameters. For that reason, the two sides have agreed on far-reaching provisions in order to guarantee fair competition. This concerns the sphere of state aid and standards of protection for consumers, labour, the environment and the climate. You can find the precise provisions which entered into force in full on 1 May 2021 on the websites of the relevant federal ministries as well as the European Commission. A brief overview can be found here.
However, there could not be a genuine economic partnership if the future relationship did not go beyond trade issues. The European Union and the United Kingdom have therefore also agreed on the framework for future cooperation in many other spheres: services, professional qualifications, public procurement, environmental and energy issues, air, sea and rail freight transport, as well as regulations on social security and research and development. Under the Agreement, the UK will continue to participate in a whole series of EU programmes.
In light of the close links between the European Union and the United Kingdom and their geographical proximity, the Agreement also establishes a close security partnership. This facilitates cooperation on justice and home affairs issues. In concrete terms, this means that both sides will continue, for instance within the context of Europol, to work together closely on fighting crime and will cooperate on combatting money laundering, transnational crime and terrorism. In addition, the Agreement regulates the mutual exchange of data, for example airline passenger data or criminal records. All of this will be done in compliance with the European Convention on Human Rights and data protection standards comparable to those in the EU.
Although the EU would have wished it, unfortunately the Agreement does not contain any provisions on cooperation in the sphere of foreign and security policy. The EU and the UK will remain key partners in NATO, the OSCE and the UN. The Federal Government continues to advocate close foreign and security policy cooperation with the UK, also within the EU.
On what basis did the European Commission lead the negotiations?
With the withdrawal of the United Kingdom from the European Union as of 1 February 2020, the Withdrawal Agreement previously negotiated between the EU and the UK entered into force. The Withdrawal Agreement regulates key issues such as citizens’ rights. This agreement was accompanied by a Political Declaration, in which an agreed framework for negotiating the future relationship was outlined. In line with the Political Declaration, the 27 EU member states agreed on 25 February 2020 to the negotiating mandate for the European Commission, which conducted the negotiations on the future relationship with the UK on behalf of the member states. From March to December 2020, the EU and the UK conducted ongoing negotiations notwithstanding the difficulties caused by the COVID19 pandemic. The European Commission closely consulted with the 27 member states, as well as with the European Parliament, on a regular basis throughout. Towards the end, the two sides intensified the negotiations even further and an agreement was reached on 24 December 2020.
What happened at the end of the transition period? What preparations were made?
The period between the United Kingdom’s withdrawal from the EU on 1 February 2020 and 31 December 2020 was a transition period agreed upon in the Withdrawal Agreement. It gave citizens, businesses and public administrations time to prepare for the UK leaving the EU single market and the EU customs union.
Since 1 January 2021, the UK has no longer been part of the EU single market or the EU customs union. The EU’s relationship with the UK has thus fundamentally changed, notwithstanding the new Trade and Cooperation Agreement.
The Federal Government made timely and comprehensive preparations for these changes, which were already foreseeable before the end of the transition period and which would happen regardless of the outcome of the negotiations on the future relationship. Within the EU, the German Government has been in very close contact with the European Commission and the other member states, and at national level with the Länder and all stakeholders (the business community, associations, citizens) since the negotiations started. This close contact will continue after the Agreement enters into force.
On 9 July 2020, the European Commission published a readiness communication outlining the changes that would take place – regardless of the outcome of the negotiations. Detailed information on the individual changes (for example, travel, customs duties, data protection law, industrial products, chemicals, etc.) can be found in the almost 100 sector-specific stakeholder readiness notices. These are intended to help public administrations, companies and citizens adapt to the new situation.
What role does the Withdrawal Agreement play?
Thanks to the Withdrawal Agreement, the EU’s freedom of movement, i.e. the right to live, work, study or have social security coverage anywhere in the EU and in the UK, continued to apply until the end of the transition period. Furthermore, EU citizens residing in the UK up until 31 December 2020 and UK citizens residing in the EU up until 31 December 2020 will enjoy lifelong comprehensive protection of their rights; they can continue to live, work, study and enjoy social security in the UK and the EU respectively.
These rights are contained in the Withdrawal Agreement; the resulting obligation to safeguard these rights will be implemented through national legislation and measures. In Germany, the Act on the Current Amendment of the Freedom of Movement Act/EU and of Other Legislation in Line with Union Law entered into force on 24 November 2020. This Act secures the status rights of UK nationals and their family members entitled to freedom of movement in line with the Withdrawal Agreement. Further information is available on the website of the Federal Ministry of the Interior, Building and Community.
Since its withdrawal on 1 February 2020, the UK has had no say in the EU institutions. Moreover, UK citizens have been excluded since then from participating in European citizens’ initiatives and no longer have the right to vote in local elections in other EU countries or in European Parliament elections, or to stand as candidates in such elections.
The special Protocol for Northern Ireland (Northern Ireland Protocol), attached to the Withdrawal Agreement, guarantees the continued integrity of the EU single market; at the same time, it ensures that there will be no controls at the border between Ireland and Northern Ireland and that the Good Friday Agreement remains fully in force. The Protocol provides that Northern Ireland will remain part of the UK’s customs territory but that all relevant rules of the EU single market will apply in Northern Ireland as will the Union Customs Code. The checks and collection of customs duties that this will entail will take place inter alia at the entry points to the island of Ireland in Northern Ireland. In December 2020, the European Commission and the UK agreed on delaying the start of certain checks for several months.
Following the UK Government’s unilateral announcement on 3 March 2021of its intention to extend these check exemptions for goods and customs applying to certain product groups, the European Commission launched infringement proceedings against the UK on 15 March 2021. The UK submitted its observations in response to the letter of formal notice from the European Commission by 15 May. The European Commission is now assessing this response.
At the same time, the European Commission and the UK are working on a timetable for the full implementation of the Northern Ireland Protocol with a view to having clear, long-term regulations for the communities and the businesses in Northern Ireland.
The Withdrawal Agreement establishes a Joint Committee in which the parties meet regularly under the chairmanship of Maroš Šefčovič, Vice-President of the European Commission, and David Frost, the Minister responsible on the UK side, to engage in dialogue on the implementation of the Withdrawal Agreement.
What is more, the UK’s financial obligations towards the EU are one of the points laid down in the Withdrawal Agreement. [The European Commission answers more questions on the Withdrawal Agreement on its website.]