UK-EU Future Relationship Agreement
The Brexit Transition Period ended at 11 pm on 31st December and the UK has now entered its new relationship with the EU under the EU-UK Trade and Co-operation Agreement which was finalised on the 24th December. A summary of the agreements and the full document can be found here, and the UK Government continues to update their Brexit Guidance which will also be useful to members.
The EU has produced a summary of the new arrangements, and additional advice from the Scottish Government can be found in their prepareforbrexit.scot resource with further detail available on mygov.scot/brexit.
The headline message is that that the UK and the EU have agreed to zero tariff and zero quota trade on goods, therefore businesses will not face costly tariffs, nor quota restrictions. This is of course welcome news for many in the manufacturing and engineering sector, however as we have previously briefed, there are now a range of additional requirements on businesses trading with the EU, including customs procedures, Rules of Origin requirements, and dual Conformity Assessments. All of these will place additional burdens of cost and complexity on UK Businesses.
The agreement is both complex and detailed and we will be exploring the implications for our sector over the coming days and weeks. Meantime we highlight below some of the main issues arising under these new trading arrangements:
- Customs Procedures – Customs declarations and associated paperwork will have to be completed accurately to allow the movement of goods either way between the UK and the EU, however, the Agreement does allow for streamlined procedures via Trusted Trader Schemes (Authorised Economic Operator). The UK Government has already introduced a phased approach to introducing the additional processes and checks required to import goods from the EU under the “Border Operating Model”, and detailed guidance on procedures for importing and exporting can be found here.
- Rules of Origin – Goods produced by UK businesses will have to meet Rules of Origin requirements to qualify for zero tariffs and quotas. This means that businesses will have to identify the full origins of their products to prove they qualify as “local”. Advice on Rules of Origin can be found here.
- Conformity Assessment: Businesses will have to undergo two sets of conformity assessments (UKCA and CE) if they are seeking to place a product on both the UK and EU markets, however, the agreement provides limited scope for mutual recognition and streamlining of conformity assessments in specific sectors including automotive, pharmaceuticals and chemicals. Using the UKCA marking
- Business Trips– The agreement allows for short term business/work-related trips without visas/work permits between the UK and EU for up to 90 days in any 180 day period, and for providing services on contracts lasting up to 12 months. However, some EU member states have their own specific immigration requirements, and these should be consulted before visiting, along with current COVD-19 specific restrictions.
- Global trade agreements – The UK will no longer have access to EU Trade Agreements with global trading partners, however, the UK Government has secured roll-over agreements with a number of key trading partners including Switzerland, South Korea, Singapore, and Turkey. A number of other “rolled-over” agreements have been signed but not ratified as of 1st January, including Mexico and Canada. UK Government guidance on the full list of agreements is available here.
Please let us know if any of these details raise concern for your business, if there are areas you would like us to seek further clarity from the UK Government on, or if there are issues that you have identified and would like us to share with other member companies.