Brexit Business Brief | Getting to grips with the Trade and Cooperation Agreement
Published on 7th Jan 2021
Our regular newsletter looking at Brexit developments in a legal and business context
The Trade and Cooperation Agreement
So we have an end, or a beginning, depending on one's perspective. On 30 December 2020, the EU and the UK ratified their 'Trade and Cooperation Agreement' (the TCA). In the EU's case, it was provisionally ratified, pending approval by the European Parliament in early 2021.
As a way of approaching the challenge of getting to grips with the TCA, the rest of this Brexit Business Brief deals with some FAQs that have come my way.
Can you tell me what is in the TCA?
Good try. However, in summary: The TCA is an umbrella agreement setting out the terms of many aspects of the future relationship between the EU and the UK. As well as addressing 'Trade, Transport, Fisheries and Other Agreement' – i.e. the parts of most interest to business – the TCA also covers 'Law enforcement and Judicial Cooperation in Criminal Matters' and 'Dispute Settlement and Horizontal Provisions', and contains all the scene-setting, definitional and interpretative paraphernalia one would expect in a major international treaty.
The TCA's substantive provisions run to 430 pages. There then follow a further 844 pages of annexes and protocols. It is in these annexes in particular that the detail of what has been agreed – and so what is relevant in practical terms to business – is found. More on that below.
But how do I start to get to grips with the TCA?
Thankfully, for most, we will find what is relevant to us in the TCA and then not have to delve into the rest of it. There is a serviceable, clickable index at the front of the TCA, which is helpful in manipulating this lengthy document.
In terms of structure, it is useful to know that Part Two of the TCA, which deals with the areas of interest to business, is built as follows: Part Two > Heading > Title > Chapter > Article.
For example, the provisions on short-term business trips between the EU and the UK are at: Part Two: Trade, Transport, Fisheries and Other Agreements > Heading One: Trade > Title II: Services and Investment > Chapter 4: Entry and temporary stay of natural persons for business purposes > Article SERVIN 4.3: Short-term business visitors.
And then the provisions of Article SERVIN 4.3 must be read with the annexes referenced in the article (being, with logic, Annex SERVIN-3)
What one thing should I know about the TCA?
Excellent and unanswerable question! However, I would say, and bear with me, I am a lawyer, that the devil really is in the detail. And that detail is in the annexes.
Take Title II: Services and Investment. This sets out numerous excellent general provisions to facilitate trade in services. For example, Article SERVIN 4.3, mentioned above, states that 'each Party [i.e. the EU and the UK] shall allow the entry and temporary stay of short-term business visitors of the other Party'.
That general provision is then qualified by a list, contained in Annex SERVIN-3, which sets out which business activities are 'permitted' during these short-term trips. So one needs to check that the business trip's purpose falls within that list.
Then the 'non-conforming measures' relating to each EU Member State have to be consulted. These are specific exceptions and conditionalities for each country.
So, for example, a business trip to attend 'trade fairs and exhibitions…for the purpose of promoting [a] company' is on the 'permitted list', but to do so in Austria a work permit is also required if the activity will last more than seven days in a month (that is an Austrian 'non-conforming measure').
This process – general provision followed by permitted list and/or national non-conforming measures – applies to many of the provisions of the Trade section of the TCA
Are there any good overviews of the TCA?
The European Commission has produced this excellent set of general Q&As on the TCA.
There is also this six page brochure from the Commission, which is a good starting point. Finally from the EU, this two pager summarises the past 47 years of the UK's membership and the future relationship.
And Osborne Clarke?
We are producing a Brexit/TCA-focused edition of our 'Regulatory Outlook', which will be published shortly. It will be sent to the recipients of this Brexit Business Brief.
I wrote '10 very short takeaways for business on the TCA' on 29 December 2020. It is very short.
Doesn't the TCA need to be implemented in UK domestic law?
Yes. This is achieved by the European Union (Future Relationship) Act 2020 (EURA), which became law in the first hour of 31 December 2020 after a one-day passage through the Westminster Parliament.
If you like to know more about how the EURA‚ and its remarkable 'section 29' provision‚ implements the TCA, I wrote about that here.
Final question: has the EU given an adequacy decision on personal data transfers?
No, or not yet. This was never a TCA topic‚ an adequacy decision is in the unilateral gift of the EU and so not for negotiation‚ but what the TCA does do is put in place an interim solution that buys the EU more time to conclude its formal decision. Under this interim solution, transfers to the UK are to be considered as if they were still transfers within the EU‚ so no other transfer mechanisms, such as standard contractual clauses (or supplementary measures), are required for those transfers for the moment. This solution is time-limited: four months, extendable to six months.
For more on this interim solution and on UK and EU data protection post-Brexit generally, see this Osborne Clarke Insight by my data protection colleagues.