Trade in goods
Summary: The agreement ensures that most goods traded between the EU and UK won’t face new tariffs or quotas. However, British exporters will face an array of new regulatory hurdles that will make it more costly and burdensome to do business in Europe.
UK and EU goods will continue to receive tariff-free and quota-free treatment.
Rules of origin:
New rules require the UK to self-certify the origin of its exports to the EU. Certain products that contain a high threshold of inputs from outside the EU and UK may face new tariffs.
Health and safety:
The EU will require UK agri-food exporters to provide health certificates and undergo sanitary and phyto-sanitary controls at border inspection posts.
Testing and certification:
UK regulatory bodies won’t be able to certify products for sale in the EU, a potentially big barrier to trade.
The EU and the UK may pursue tariffs and other sanctions according to rules established at the World Trade Organization.
The deal offers little clarity for financial firms. There is no decision on so-called equivalence, which would allow firms to sell their services into the single market from the City of London. The agreement only features standard provisions on financial services, meaning it doesn’t include commitments on market access.
The two sides made a joint declaration to support enhanced cooperation on financial oversight. They aim to agree on a Memorandum of Understanding by March.
Level playing field
The deal commits both sides to upholding their environmental, social, labour, and tax transparency standards to make sure they don’t undercut each other. The British say the deal doesn’t include a ratchet mechanism that would force it to stiffen its rule in lockstep with the EU.
Either side will be able to impose with tariffs if they diverge too much — subject to arbitration.
The trade deal can be reopened if the two sides fail to resolve a dispute, or want to change the terms of the agreement, according to people familiar with the matter.
This was one of the most contentious areas after disputes over the control of British fishing
grounds came to symbolise the country’s desire to leave the EU.
UK fleets will take 25 per cent of the current EU catch in British waters, worth £146 million ($198 million), phased in over five years. Britain’s opening negotiating position called for an 80 per cent increase.
There is a transition period of five-and-a-half years during which reciprocal access rights to each other’s waters remain unchanged.
Both sides pledge to limit customs
red tape, including through programmes for trusted traders known as authorised economic operators.
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