The recently agreed upon trade and cooperation agreement between the European Union (EU) and the United Kingdom (UK) is set to have significant consequences for both parties. The agreement comes into force after a lengthy negotiation period, which culminated in the historic agreement being signed on December 24, 2020.
The trade and cooperation agreement aims to provide clarity on the UK and EU`s future economic relationship. The agreement covers various sectors, including trade in goods and services, fisheries, transport, energy, and law enforcement, among others.
One of the most significant aspects of the agreement is the establishment of a free trade area between the UK and the EU. This means that goods traded between the two parties will be free from tariffs or quotas. In essence, this will mean that businesses will continue to have access to the EU and UK markets without any additional costs.
However, it is important to note that certain products will still require customs checks and certifications, which may cause delays and additional costs for businesses. The agreement also aims to provide a level playing field for businesses in both the UK and the EU, ensuring that both sides maintain high environmental, labor, and social standards.
Another crucial aspect of the agreement is the mechanism for resolving disputes between the parties. The agreement includes provisions for an independent arbitration panel to resolve disputes arising from the agreement. This will be vital in ensuring that both parties are held accountable for their actions and obligations under the agreement.
The fisheries sector is another critical area covered by the agreement. The UK and the EU have agreed to a five-and-a-half-year transition period, during which EU vessels will continue to have access to UK waters. After this transition period, the UK will have the right to determine its own fishing policies and manage its waters accordingly.
In conclusion, the trade and cooperation agreement between the EU and the UK is an essential step in defining the future economic relationship between the two parties. While the agreement provides clarity and certainty for businesses, there will still be additional costs and hurdles to overcome in certain areas. Nevertheless, the agreement sets in place a solid foundation for future cooperation and collaboration between the UK and the EU.