UK GDP is dominated by services, however only about 40 per cent of exports are services. UK has a trade surplus with EU on services and a trade deficit on goods. 2/3 UK goods exports go to the EU.
The UK-EU Trade and Cooperation Agreement establishes zero tariffs or quotas on trade between the UK and the EU, where goods meet the relevant ‘rules of origin’. In order for the Irish Sea border to effectively function, Northern Ireland has remained part of the EU’s single market for goods while the rest of the UK has left the single market. Where goods are imported into NI from Great Britain customs checks may be required if the goods are at risk of passing into the EU and compliance with EU standards may be required. As such, firms and companies in Great Britain which are sending goods to Northern Ireland need to be prepared for the required new processes and paperwork, and may experience some delays as they travel through border control posts.
The Agreement ensures continued market access rights for UK and EU road haulage operators. The transport of goods by road should not be greatly inhibited by the Agreement, with operators continuing to be able to move goods between the UK and EU through other EU Member States’ territories with no permit requirements, albeit with limits on the number of permitted movements within EU Member States. The Agreement also sets out the standards to which operators must adhere when travelling to the EU. These standards for the carriage of goods into the EU are similar to those which UK operators are already subject when operating internationally, with some bespoke standards aimed at ensuring greater road safety and effective regulation which include restrictions on driver hours, requirements about professional qualifications, the installation of tachographs and vehicle weight and dimension limits. There may also be requirements to demonstrate adequate insurance which will need to be confirmed.
The new EU-UK border means that service providers may not be permitted to provide services outside of the UK, depending on the sector in question. UK professional qualifications and licences will not be automatically recognised in the EU, which could result in difficulty for UK citizens currently supplying services in the EU. In most cases, individuals will have to apply to specific EU Member States to get their qualifications accepted. The Agreement does contain a framework for the UK and EU to agree on mutual recognition of individual qualifications, which it is hoped will allow the UK and its regulators to maintain standards of professional competence. Provisions on professional qualifications are without prejudice to alternative arrangements that the UK may agree with the EU, allowing for improved mechanisms to be agreed in the future. It is expected that any future/ alternative arrangements will be negotiated on a profession by profession basis.
The UK will treat the EU as a bloc for short-term visit visas, however this position will not apply to future Member States unless the UK agrees. As such, the UK will be able to determine whether short-term visits from the EU should be subject to visa requirements for any additional Member States joining the EU in the future. At present the United Kingdom provides for visa-free travel for short-term visits in respect of nationals of all Member States. For EU, EEA or Swiss Citizens travelling to the UK, in most instances individuals will be able to stay for up to 6 months, without applying for a visa.
UK citizens will not have the automatic right to live or work in the EU, with freedom to work and live between the UK and EU coming to an end. In 2021, UK nationals will need a visa if they want to stay in the EU for more than 90 days in a 180-day period. There will be an end to freedom of movement and the reintroduction of temporary visas for work-related purposes. However, the Agreement does include permitted ‘visa-free’ activities for short-term business visitors, which include amongst other things, attending meetings or conferences, engaging in consultation with business associates, receiving training and sales trips (though short term business visitors cannot engage in making direct sales to the general public). Some sectors, including financial services and energy, are subject to future regulatory decisions, adding to uncertainty.
For any individuals travelling to Europe, on the day of travel their passport must have at least 6 months left before expiration, and be less than 10 years old. Additional actions will be required for individuals travelling for business purposes, and anyone travelling to the EU for business is encouraged to check the entry requirement and rules of the specific EU Member State they are visiting to find out if a visa or work permit is required.
The rights and status of EU, EEA and Swiss citizens that were living in the UK by 31 December 2020 will remain the same until 30 June 2021. Individuals that apply to the EU Settlement Scheme successfully, will be able to continue living and working in the UK after 30 June 2021, having been given a Settled Status or Pre-Settled Status. Settled or Pre-settled Status will allow individuals to live and work in the UK, use the NHS and enrol in education or study.
In the short term it is expected that the UK will continue to trade with the rest of the world on the same terms as it currently does (including those EU trade deals it has been able to roll over) using the World Trade Organisation Most Favoured Nation schedules negotiated on the UK’s behalf as a member of the European Union. In the longer term, when trading with the rest of the world, the UK will seek to negotiate and adopt regulations/taxation or independent approaches better aligned to its policy or with a comparative advantage to competitors.