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A look at the detail: What is in the Brexit trade deal?

From what has been published so far, the UK conceded on both fisheries and the level playing field, while the EU conceded on governance.

Image: PA Images/Photojoiner

THE ANNOUNCEMENT OF a post-Brexit trade deal being struck has been welcomed by politicians in the UK, EU and Ireland with much fanfare. 

But what’s in it?

Although the full Agreement in Principle has not been published yet, the European Commission has published documents giving some details on what is in the trade deal, while the UK has published a summary of the deal. 

Among the issues that trade experts and stakeholders had been most concerned about were: rules of origin, customs arrangements, and whether there will be cooperation on security – on things like data and the European Arrest Warrant.

Here’s a broad-stroke glance at what is in the so-called ‘Trade and Cooperation Agreement’.

A general overview

At first glance, this is a hard Brexit deal – the UK is leaving the Single Market and Customs Union. After the 1 January:

  • No free movement of people: UK citizens will no longer have the freedom to work, study, start a business or live in the EU. They will need visas for long-term stays in the EU. Border checks will apply, passports will need to be stamped, and EU pet passports will no longer be valid for UK residents.
  • No free movement of goods: Customs checks and controls will apply to all UK exports entering the EU. UK agri-food consignments will have to have health certificates and undergo sanitary and phytosanitary controls at Member States’ border inspection posts. This will cost UK businesses time and money.
  • No free movement of services: UK service providers will no longer benefit from the country-of-origin principle. They will have to comply with the – varying – rules of each EU country, or relocate to the EU if they want to continue operating as they do today. There will be no more mutual recognition of professional qualifications. UK financial services firms will lose their financial services passports.

Despite the customs checks, this trade deal means that there will be no tariffs or quotas on British goods going between the UK and the EU – the first time the EU has agreed to a zero-tariff, zero-quota deal.

From what has been published so far, the UK appears to have conceded on both fisheries and the level playing field, while the EU conceded on the jurisdiction of the European Court of Justice to decide on whether the trade deal has been breached in the future.

In the foreword of the UK’s summary document, which UK chief negotiator David Frost urged people to read, it states that there is “no role for EU law and no jurisdiction for the European Court of Justice”.

Brexit before and after Source: European Commission

Brexit before and after 2

The level playing field

It appears that the UK has agreed to adhere to the EU’s request for a baseline of standards in relation to workers’ rights, the environment, and State aid.

The European Commission said that both parties signed up to “a robust” level playing field by maintaining high levels of protection in areas such as environmental protection, the fight against climate change and carbon pricing, social and labour rights, tax transparency and State aid.

There will also be “effective, domestic enforcement, a binding dispute settlement mechanism and the possibility for both parties to take remedial measures”.

European Commission president Ursula von der Leyen said earlier that if the UK doesn’t adhere to these rules, they can enforce tariffs and quotas, adding “there will be a price to pay for that”.

The UK said it had committed to “high labour environment and climate standards without giving the EU any say over our rules”.

This Agreement ends the EU State Aid regime in Great Britain and allows us to introduce our own modern subsidy system so that we can better support businesses to grow and thrive in a way that best suits the interests of British industries.

Fisheries

The UK conceded on fisheries. While the UK wanted a 35% reduction phased in over 3 years, and the EU wanted a 25% reduction over 6 years, what has been agreed is much closer to the EU’s requests.

In the UK documentation: “The Agreement provides for a significant uplift in quota for UK fishers, equal to 25% of the value the EU catch in UK waters. This is worth £146m for the UK fleet phased in over five years.”

There will be also be an “adjustment period” which provide stable access for 5 ½ years.

For the adjustment period, the Agreement also provides access to a limited part of the UK territorial waters for vessels which have traditionally fished in those areas.

Rules of origin

This will be a hotly-examined topic, and based on the documents published so far, we still don’t really know what’s involved.

The most important line published today is in the European Commission document, which says that in order “to facilitate compliance and cut red tape, the Agreement allows traders to self-certify the origin of goods”.

It also states that it provides for ”full cumulation“, meaning traders can account not only for the originating materials used, but also if processing took place in the UK or EU.

This allows EU inputs and processing in UK products to be counted as UK input when exported to the EU, and vice versa.

According to UK documents: “The ambitious arrangements include facilitations on average pricing, accounting segregation for certain products, as well as all materials, and tolerance by value.

“The rules are also supported by predictable and low-cost administrative arrangements for proving origin.”

European Arrest Warrant

This is a key issue, particularly for Ireland and Northern Ireland. The UK will be leaving the arrangement, as has been flagged perviously, but a different arrangement will replace it.

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The UK document states that the deal provides for “streamlined extradition arrangements”, similar to those the EU has with Norway and Iceland, but with
“appropriate further safeguards” beyond those in the European Arrest Warrant.

Elaborating on the benefits, it states:

“To streamline cooperation, the Agreement provides for direct transmission between judicial authorities, limited grounds for refusal and timelimited processes.

It also includes additional provisions which make clear that a person’s surrender can be refused if their fundamental rights are at risk, extradition would be disproportionate, or they are likely to face long periods of pre-trial detention.

“Where extradition of own nationals from certain EU Member States is not possible due to their constitutional principles, we have ensured there is nevertheless a path to justice in every case, for example, by obliging EU Member States to refer cases to their own prosecution authorities.”

The Erasmus programme

UK citizens will no longer have access to that programme. EU chief negotiator Michel Barnier said that this was the UK’s request.

Boris Johnson said the programme would be replaced by a worldwide scheme named after Bletchley Park code breaker Alan Turing.

The Irish government has ensured that citizens in Northern Ireland can still take part in the Erasmus+ programme.

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