At 23:00 on 31 December 2020, the UK withdrew from the European single market. This ended the transition period which followed the UK’s departure from the EU on 31 January 2020. But, with the Trade and Cooperation Agreement (‘the deal’) signed on 30 December, it was agreed that there would be no tariffs or quotas on trade in goods between the UK and the EU.
So what are the new economic relations between the EU and the UK and how will they impact on the UK economy? What new restrictions are there on trade in goods and on the movement of labour and capital? How is trade in services, including financial services, affected? What new agreements, such as on fishing, will replace previous agreements?
What will happen to trade between Northern Ireland and the Republic of Ireland? What will happen to trade between Great Britain and Northern Ireland?
What will happen to regulations over standards of traded products and their production? Will the UK government be able to provide subsidies or other types of support for goods or services exported to the EU? How will disputes about standards and support to companies be resolved?
How will trade with non-EU countries change? If the EU has trade agreements with such countries, do these agreements now apply to trade between the UK and such countries? How free is the UK now to negotiate new trade agreements with non-EU countries? How will the UK’s negotiating strength be affected by its withdrawal from the EU?
Rather than listing the changes here, follow the links below to the articles and assess the nature of the changes and then attempt the questions. The articles represent a balance of views.
What is clear is that these are all big issues and are likely to have a significant impact on the UK economy. Most economists argue that the net effect will be negative on trade and economic growth, but there is huge uncertainty about the magnitude of the effects. Much will depend on how arrangements between the UK and the EU develop over the coming months and years.
Articles
Brexit deal explained: What will be the impact of UK’s agreement with EU?- Brexit deal: What is in it?
- Brexit: What are the key points of the deal?
- Brexit trade deal explained: the key parts of the landmark agreement
- The key details of the Brexit deal summarised, from trade to fishing
- Committees, visas and climate change: Brexit experts’ verdicts on the deal details
- The left must stop mourning Brexit – and start seeing its huge potential
- The Guardian view on Britain out of the EU: a treasure island for rentiers
- Brexit Is Finally Done, but It Already Seems Out of Date
- Towards a modern UK-EU trade relationship
- Brexit Is a New World Businesses Still Need to Figure Out
Sky News, Ed Conway (24/12/20)
BBC News, Chris Morris (28/12/20)
BBC News, Tom Edgington (30/12/20)
Financial Times (25/12/20)
The Telegraph, James Crisp and Gordon Rayner (3/1/21)
The Guardian, Lisa O’Carroll (28/12/20)
The Guardian, Larry Elliott (31/12/20)
The Guardian, Editorial (27/12/20)
New York Times, Mark Landler (30/12/20)
Best for Britain, David Henig (28/12/20)
Bloomberg, Deirdre Hipwell, Craig Trudell, and Dara Doyle (1/1/21)
UK and EU documents
- Agreements reached between the United Kingdom of Great Britain and Northern Ireland and the European Union
- The UK-EU Trade and Cooperation Agreement: summary and implementation
- Trade and Cooperation Agreement between the European Union and The European Atomic Energy Community, of the one part, and the United Kingdom of Great Britain and Northern Ireland, of the other part
- Questions & Answers: EU-UK Trade and Cooperation Agreement
- EU-UK Trade and Cooperation Agreement: A new relationship, with big changes – Brochure
- EU-UK Trade and Cooperation Agreement: A new relationship, with big changes – Overview of consequences and benefits
Prime Minister’s Office, 10 Downing Street (31/12/20)
House of Commons Library, Research Briefing, Stefano Fella et al (30/12/20)
European Commission (31/12/20)
European Commission (24/12/20)
European Commission (24/12/20)
European Commission (24/12/20)
Questions
- Summarise the main features of the Trade and Cooperation Agreement and how the UK’s new relationship with the EU differs from being a member.
- What are the potential economic benefits from being outside the EU?
- What are the economic drawbacks for the UK from having left the EU, albeit with the new Trade and Cooperation Agreement?
- On balance, do you think that the UK will gain or lose economically from having left the EU? Explain your answer.