- The TCA sets out the new trading terms and the framework of the future cooperation between the UK and the EU.
- For services, there are provisions in the TCA around the movement of people, and the ability to provide services across borders. There are also complex services reservations. On goods, there are zero tariff and zero quotas, but some additional barriers to trade such as administration relating to customs and VAT, plus sanitary and phytosanitary (SPS) checks.
- A three year extension has been granted to the rules of origin on electric cars traded between the UK and the EU, ensuring that new 10% tariffs are not imposed.
- After two years of negotiations since the Northern Ireland Protocol originally came into force, the UK and the EU reached an agreement to change the way it is implemented. The Windsor Framework established Red and Green Lanes for goods entering NI, substantial agri-food easements for GB-NI movements, allowing all UK medicines to be available in NI, and more UK flexibility on VAT and alcohol duty. The ‘Safeguarding the Union’ agreement announced in January 2024 builds on these arrangements to strengthen the UK internal market and enable power-sharing in NI.
- Given the resolution to the Northern Ireland Protocol, the UK and the EU have pursued closer ties, with a new Memorandum of Understanding on financial services signed and the UK taking up association membership of Horizon and Copernicus.
- The Labour government has stated that it plans to “reset” the relationship with Europe. Their plans include a Sanitary and Phytosanitary Agreement and a broad security pact. However, the Labour Party have committed to remaining outside the Single Market and the Customs Union, so substantial change in the short term is unlikely.
- Timing: the TCA is the status quo for trade with Europe. The TCA is due to undergo a review, commencing by 31 December 2025, but the Labour government may seek to make side agreements or other changes before this date.
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