The UK EU Agreement in Principle: What It Means for Trade and Relations

On December 24, 2020, the UK and the EU announced that they had reached an agreement in principle on their future relationship. The agreement, which came after months of negotiations, sets out the terms of trade and cooperation between the two sides after the UK`s departure from the EU on January 1, 2021.

So, what does the UK EU Agreement in Principle mean for trade and relations? Here`s a rundown:

Trade

The UK EU Agreement in Principle covers a range of issues related to trade, including tariffs, quotas, and regulatory alignment. Under the agreement, the UK and the EU have agreed to zero tariffs and zero quotas on all goods that meet the relevant rules of origin. This means that there will be no tariffs or quotas on goods traded between the two sides, as long as they are deemed to have been made mostly with materials sourced from the UK or the EU.

However, the agreement does not cover all goods. For example, it does not cover services, which are a crucial part of the UK economy. In addition, there will be new customs procedures and checks on goods traded between the UK and the EU, which will add to the cost and complexity of doing business.

Overall, the UK EU Agreement in Principle is a significant step forward for trade between the UK and the EU, but there are still many challenges to overcome.

Relations

The UK EU Agreement in Principle also covers a range of issues related to relations between the two sides, including cooperation on security, law enforcement, and foreign policy. Under the agreement, the UK and the EU have agreed to cooperate on issues such as cybersecurity, counterterrorism, and climate change.

In addition, the agreement includes a framework for resolving disputes between the UK and the EU. This is important because the UK and the EU will inevitably have disagreements in the future, and it is essential to have a mechanism for resolving them.

Overall, the UK EU Agreement in Principle is a positive development for relations between the UK and the EU. It provides a framework for cooperation and helps to mitigate the risk of conflict.

Conclusion

The UK EU Agreement in Principle is a significant development for trade and relations between the UK and the EU. While it is not perfect, it provides a foundation for future cooperation and helps to mitigate the risk of conflict. As always, the devil is in the details, and there will be many challenges to overcome in the coming months and years. However, the UK EU Agreement in Principle is a step forward, and it is important to build on this progress in the years to come.