On 24 December 2020, the EU and UK announced an agreement in principle on a new Trade and Cooperation Agreement. The deal will mean that UK goods can be sold in the EU and EU goods in the UK, without tariffs or quotas.

The UK government announced:

‘The United Kingdom and the European Union have agreed a Trade and Cooperation Agreement, an Agreement on Nuclear Cooperation and an Agreement on Security Procedures for Exchanging and Protecting Classified Information. These Agreements are designed to honour the instruction of the British people—expressed in the referendum of 2016 and the general election last year—to take back control of our laws, borders, money, trade and fisheries. It changes the basis of our relationship with our European neighbours from EU law to free trade and friendly cooperation.’

The UK government has published a summary of the deal: UK-EU Trade and Cooperation Agreement Summary

The agreement sets out the agreed legal terms of the future UK-EU trade, economic, social and security cooperation relationship. It includes a free trade deal, broad economic and social partnership, security cooperation and an agreed single governance framework. It is the most significant trade deal either side have reached with any country outside the single market, worth an estimated £660 billion.

The European Commission’s President, Ursula von der Leyen said:

‘We have, finally, found an agreement. It was a long and winding road. But we have got a good deal to show for it. It is fair and balanced. And it is the right and responsible thing to do for both sides. ….. Finally, we can leave Brexit behind us and look to the future. Europe is now moving on.’

Both sides expressed their relief at having reached a deal before the end of the transition period, on 31 December 2020.

The deal does not cover financial services equivalence, data protection adequacy and third country SPS listing which were outside scope of the negotiations. Foreign policy, external security and defence cooperation are also excluded from the deal, and will be negotiated separately.

The agreement does not make changes to the rights of UK nationals to work in the EU, which will be subject to Schengen arrangements and domestic legislation of each Member State, or to European nationals’ rights to work in the UK. For European nationals planning to move to the UK for work after the end of the transition period, there will be no preferential access and they will need to satisfy the Immigration Rules which apply to nationals from the rest of the world.

The UK Parliament is expected to be recalled to review and vote on the deal. It is anticipated that the deal will come under some criticism but that it will be passed in the UK. The EU Parliament will need to ratify the deal ready for signature. The EU Parliament is not expected to reconvene before January, but it is expected the agreement will be applied on a provisional basis pending ratification.