We take a look at the main agreements that make up the trade and security deal finalised on Christmas Eve
The Brexit trade and security deal, finalised on Christmas Eve, runs to 2,000 pages, including annexes. It will enter into force once approved by both sides.
The devil of what has been agreed will be in the detail – and will be pored over in the days to come.
Here are the main agreements, at a glance.
Tariff-free and quota-free access to one of the world’s biggest markets is the backbone of the Brexit deal and goes beyond the EU’s deals with Canada or Japan.
There will be mutual recognition of trusted trader programmes. This means UK producers will have to comply with both UK and EU standards.
There will be no more automatic recognition for doctors, nurses, architects, dentists, pharmacists, vets, engineers. They will now have to seek recognition in the member state they wish to practise in.
Mobility – freedom of movement
UK nationals no longer have the freedom to work, study, start a business or live in the EU. Visas will be required for stays over 90 days. Coordination of some social security benefits such as old-age pensions and healthcare will make it easier to work abroad and not lose any pre-existing build up of contributions to national insurance.
The UK will leave the common fisheries policy.
The annual turnover of EU fishing vessels from British waters is around €650m – compared with €850m for the UK-flagged fleet. New quotas reducing the EU’s share by 25% are due to be phased in over five and a half years. A quarter of the EU’s catch by value – €162.5m a year – will be “repatriated” to UK-flagged vessels by the end of that period. After that, the two sides will hold annual negotiations.
The EU vessels that fish six to 12 nautical miles from the British coastline will be able to continue during the transition, but access will be negotiated on an annual basis after that. There is a three-month notice for closing access. Should access be denied to either side, the other may seek compensation or apply tariffs in a proportionate way.
The EU had insisted the UK align with its state aid rules. Brussels was concerned that the UK government would seek to find a competitive advantage through subsidies. The UK successfully killed off this idea. The UK will set up its own subsidy regime. The new domestic enforcement body can make decisions over whether state aid has distorted trade after the subsidy has been granted. This is a major concession by the EU.
However, the UK will have to ensure that its subsidy regime respects key principles set out in the treaty. The deal also allows both parties to adopt remedial measures if there is evidence that the domestic enforcement body has failed to uphold the shared principles.
Standards or level playing field
Both sides have agreed on a minimum level of environmental, social and labour standards below which neither must go.
Ursula von der Leyen said there would be a review after four years to ensure the level playing field was working.
One of the biggest sticking points in the talks was the EU’s insistence on an “evolution clause”, or “equivalence mechanism”, as Downing Street termed it.
This would have allowed the EU to unilaterally apply tariffs on UK goods in the event of standards diverging over time. If one side upgraded their rulebook, the other would have to follow, or face consequences.
In the end, compromise was reached. It bears a closer resemblance to the UK objective than that of Brussels. The British government had merely wanted a reflection point in the future where the two sides could discuss upgrading the basic minimum below which neither could go.
The deal provides for a review and “rebalancing” clause, which allows either side to initiate a formal review of the economic parts of the deal, including the minimum level of standards.
If either side drags their feet on agreeing a new floor for standards, the other may apply tariffs subject to the approval of an independent arbitration panel.
Rules of origin
This determines what goods count as “made in Britain”.
The UK persuaded Brussels that EU materials and processing should to be counted as British input when the completed products are exported into the European market.
A product would therefore only attract tariffs under the agreement if more than 40% of its pre-finished value was either not of British origin or from a non-EU country such as Japan.
The UK failed to secure diagonal accumulation, which would include parts from countries such as Japan and Turkey, with whom the UK and the EU have a trade agreement, to be counted as British input.
This was one of the most difficult areas of negotiation as it will set remedies for trade disputes for decades to come. Angela Merkel has said disagreement over an arbitration mechanism was the biggest obstacle to a deal.
The EU was concerned that the UK could, over time and depending on which government was in power, deviate so far from EU standards that it could carve out a significant competitive advantage and become a “Singapore on Thames”.
If either party feels trade is being distorted, it can take measures after consultation. An arbitrage panel would meet within 30 days and adjudicate. If the measures were later seen to have been deemed erroneous or excessive, the aggrieved party would be able to take compensatory measures.
It also appears there will be some kind of overarching UK-EU governance committee which will have subcommittees to implement and enforce the treaty.
The UK will continue to participate in the EU’s flagship €80bn Horizon Europe programme as a paying associate member for seven years. It will also continue in Copernicus and Euratom.
The UK is out of the university exchange programme, baulking at the EU’s insistent that to be an associate member it would have to commit to a seven-year payment plan.
The Irish government on Thursday confirmed students in Northern Ireland can continue to access Eramus as part of its promise to make sure Irish citizens in the region “will never be left behind” their fellow citizens south of the border. Citizens in Northern Ireland can also avail of a scheme to replace the European health insurance card (EHIC) funded by the Iris government.
Security and law enforcement
Cross-border police investigations and law enforcement can continue, with agreements that the UK can remain in key exchange programmes but not all.
The UK will no longer be part of the European Arrest Warrant system.
Nor will the UK be a full member of Europol or Eurojust. There will be “continued cooperation between the UK, Europol and Eurojust” with “strong cooperation between national police and judicial authorities”.
The UK will maintain a “mechanism for access” to the Schengen Information System (SIS II), an automated database that shares police alerts on stolen goods and missing persons.
There has also been an agreement for continued joint use of the Passenger Name Records, which provides live data on the movement of air and ferry passengers, a key tool in the fight against terrorism and the Prüm database of fingerprints, DNA and car number plates of suspects.
France successfully kept the audio visual sector out of the deal in a major blow to the UK, which is home to around 1,400 broadcasters, about 30% of all channels in the EU.
Britain’s thriving TV and video-on-demand service providers will no longer be able to offer pan European services to European viewers unless they relocate part of their business to an EU member state.
Travel into the EU for paid work
Staff seconded to the EU on business can stay for up to three years if they are managers and specialists and up to one year for trainee employees. Those on short-term business will need a work permit and may stay for a period of up to 90 days in any 12-month period.
Experts have warned that British business travellers and posted workers – those that stay in the EU to work for a limited period of time – face fines unless they get advance authorisation once the UK leaves the single market.
Under the deal, reciprocal arrangements have been made “to facilitate short-term business trips and temporary secondments of highly-skilled employees”.
Aviation and haulage will continue as before with passenger and cargo planes still able to fly and land in the EU including stopover flights from Heathrow and elsewhere in the UK that originated from outside the UK. Hauliers will also be allowed to continue to drive without special permits allocated in limited numbers to countries outside the EU. This comes as a relief to the logistics industry which feared drivers being locked out in significant numbers.
The deal hinged on the UK remaining a member of the European Common Aviation Area.
However planes will continue to fly in a temporary deal, which will have to be renegotiated urgently.