Out-Law News | 24 Dec 2020 | 11:14 am | 2 min. read
However, Clare Francis and David Thorneloe of international law firm Pinsent Masons, the law firm behind Out-Law, said that the true detail of the reported 2,000 page agreement is only likely to emerge in the coming days and that it is still subject to ratification by both UK and EU law makers.
The UK-EU trading relationship will change radically on 1 January on things like border checks ... and an end to the free movement of people and personal data
There has yet to be official announcement of the agreement and publication of the legal text, but UK government analysis of the agreement has been leaked to the media. It suggests that businesses will be able to trade goods cross the territories of the UK and EU27 countries without being subject to tariffs or quotas, though additional border checks will apply to the transport of goods where none previously existed.
There will no longer be free movement of people across borders separating the UK and EU27, with the UK set to implement a new 'Australia-style' immigration points system as a means of regulating who is able to work and live in the country.
In the area of financial services, the UK and EU have agreed to work towards a new framework of closer regulatory cooperation in the first quarter of 2021.
Separate discussions continue on the EU equivalence decisions the UK is seeking to allow UK financial service providers greater access to the EU markets. Discussions on an EU adequacy decision for facilitating the transfer of personal data from the EU into the UK also continue.
Manufacturers face additional checks on the quality and safety of their goods after the UK and EU failed to reach a compromise on conformity assessments, which will impact businesses across core sectors of the economy such as automotive and life sciences.
However, a deal has been done to enable the UK to establish its own state aid regime in accordance with established EU principles underpinned by a framework that provides for remedial action in the event of unfair competition.
Agreement has also been reached in areas such as intellectual property rights and cybersecurity.
Francis said: "The news of the free trade deal has been welcomed by businesses in the UK after what has been an incredibly difficult year. Tariff and quota free access is, for many of our sectors, a key element of the deal given the ongoing pandemic and economic crisis. As anticipated, supply chains will still need to adapt to checks and paperwork at the borders causing some friction. Ultimately the devil will be in the detail as this emerges over the coming days to enable business to plan and adapt to the new trading relationship with the bloc. This gives business precious little time to digest the deal and what this practically means for their business."
Thorneloe said: "There is a lot in the deal for businesses to welcome, but early details emerging point to some notable differences between the agreement and the unrestricted access to the EU market that the UK has previously enjoyed. This means the UK-EU trading relationship will change radically on 1 January on things like border checks, rules of origin for UK manufacturers dependent on international supply chains, duplicated conformity assessments for regulated goods sold in both the UK and EU, and an end to the free movement of people and personal data."