The EU Trade and Cooperation Agreement text was agreed on December 24th 2020, eight days before the end of the Transition Period. It has been approved by the EU Commission and Council (representing the member state governments) and by the UK government. The legislation to give effect to it has been passed into law by the UK Parliament. It has taken effect provisionally on 1 January 2021. Final approval is subject to the consent of the EU Parliament.

The EU Commission is of the view that the agreement deals only with matters within the powers of the European Union. It is of the view that it does not require approval by the individual EU parliaments.

The agreement sets up institutions made up of EU and UK representatives. Those institutions deal with ongoing issues by way of development closer cooperation and in relation to issues and disputes that may arise.

Prospectively greater enhanced cooperation may emerge over time. Future  acts and decisions of the joint institutions may enhance and develop the degree of cooperation.

It is said that the agreement is “thin” or “shallow” because if relates to matters within the exclusive competence of the United European Union institutions itself.

The EU institutions have exclusive competence in relation to customs matters and trade policies regarding third countries. Th European Union has extensive competence (i.e., powers in relation to the single market in goods although to some extent this is shared with member states. Therefore, the agreement deals comprehensively in with trade in goods.

The EU competence in relation to trade in service is less extensive. There are fundamental EU free rights to provide services cross-border and to establish a presence in another state. There are extensive rights for citizens to live and work in other states.

A surprising aspect of the agreement is the fact that there was no general lead in or  grace period for goods’ trade. There are easements and lead ins on the UK side for at least six months. The full rules apply on  the EU side immediately. This has meant that importers and exporters have had to deal with customs control since 1 January 2021.

The agreement does provide some grace periods. In the area of data protection, the EU and UK extend the period for free access for data by at least four months with a further two-month extension likely  up to 6 months in total . The intention is that during this period the EU Commission review of the UK data protection scheme will be finalised with a view to making a decision in relation to adequacy.

The relationship created by the EU UK Trade and Cooperation Agreement (TCA) is fundamentally different to that which applies between EU member states.

The Agreement is broadly similar to those between the European Union and Canada and the EU and Japan. It does go further by allowing for zero tariffs or all goods trade subject to the goods qualifying with the rules of origin. There are different provisions in relation to rebalancing and managing divergence under the level playing field provisions.

Relative to European Union membership it is a step backwards and it a much more distant relationship. This follows as a consequence of the U.K.’s decision to leave the EU customs union and single market.

The Agreement is not a comprehensive arrangement covering all trade in goods and services between the EU and the UK. The most comprehensive coverage is in relation to goods, where the Agreement creates significant new barriers. There are general and some specific provisions in some areas. There is no comprehensive rulebook for trade between the EU and the UK.

The World Trade Organisation agreements apply between almost all states in the World. They apply in the absence of any trade agreement at all. There are both general and issue specific agreements to which most WTO members are party.

The general WTO agreement in relation to goods (GATT 1994) applies to most goods and most sectors. In contrast the WTO agreement in relation to services is (GATS) much more limited and applies only to this sectors and methods of supply that individual states themselves agree

States may enter comprehensive agreements which build on the WTO agreements. They may give enhance rights and have better enforcement mechanisms. The EU UK Trade and Cooperation Agreement builds on the basic World Trade Organisation agreements. It confirms many of the basic international trade rules

The rights granted by TCA are in much more general and imprecise terms, than that the equivalent rules between EU Member States.. There is a limited body of arbitration decisions which flesh them out and give definition to them.  The permitted exceptions are themselves broad and general. Therefore, it can be much more difficult to clearly identify a breach of the rights.

In contrast, EU law create a very comprehensive detailed scheme of rights which underpins trade and business.  The EU Treaties rights on trading are detailed and EU court decisions have given them real effect and substance over 60 years. In addition, there have been thousands of EU laws which give real effect to the EU single market.

The EU rights themselves are directly enforceable by individual businesses in all courts against both governments and in most cases other businesses. The extensive range of EU law automatically overrides domestic law and courts must give effect to this. States can be penalised for the commission for failure to implement EU law. Court may grant compensation were businesses suffered damage by reason of non-implementation of EU law.

The TCA is an agreement between states. With limited exceptions, it is enforceable only between the EU and UK. If there is a breach the consequences and remedies lie largely in the area of retaliation and countermeasures. At most,  a complaint is made to the EU Commission or the UK Trade Remedies Authority.  There is a dispute mechanism under the TCA, but it does not involve compensation to traders and others for breach of the TCA guarantees.