Brexit deal – PA

Fishing

What was agreed

The fishing industry will enter a five-and-a-half year transition period, during which the EU will give back 25 per cent of the value of its catch in UK waters.

After that period, fishing rights in UK waters will be subject to an annual negotiation process, which must be concluded by December 10 in preparation for the next year.

What the Government says:

UK officials accepted “fisheries was one of the areas where we had to compromise somewhat” but insisted the UK would have “full control of our waters” after the end of the transition period.

“Where we’ve got to is acceptable, and offers gains for the fisheries industry in the short-run and a huge right to control everything and work within that,” a senior negotiator said.

What the critics say:

Barrie Deas, head of the National Federation of Fishermen’s Organisations, said the deal “will inevitably be seen by the fishing industry as a defeat” and accused the Government of sacrificing fishing “for other national objectives”.

If the UK shuts out the EU after the end of the transition period, the EU could retaliate with tariffs. One Tory Brexiteer said backbenchers “don’t like that”.

State aid

What was agreed

Under the terms of the deal, both sides could be forced to pay the other compensation if they engage in “anti-competitive” bailouts of failing companies.

An independent adjudicator will oversee the resolution of any dispute that arises from one side giving excessive aid to its firms.

The Government must demonstrate that any company it intends to give aid to has a “credible restructuring plan”, but this condition does not apply to banks.

What the Government says:

The UK says it can now implement a “modern subsidy system so that we can better support businesses to grow and thrive”.

Its current aid packages and bailouts of individual industries during the coronavirus pandemic are not included in the deal. Nor is the EU’s bailout package for aviation, aerospace, climate change and electric cars.

What the critics say:

Richard Tice, the chairman of the Brexit Party, said the UK was “more linked than I wanted” on state aid under the terms of the deal. He warned the country would “have to find ways to deal with this in future”.

Electric cars

What was agreed

UK manufacturers will eventually face tariffs when exporting electric cars to the EU unless more than 45 per cent of the components used come from European countries.

There will be a six-year transition period before the rules come into force.

What the Government says:

A senior negotiator said the rules were in line with the wishes of the electric car industry, which had asked that there was no major change to tariff penalties from so-called “rules of origin” on January 1.

The UK says the six-year period will allow the British electric car industry, which is dominated by firms including Nissan and Toyota, time to change their supply chains or face tariffs.

What the critics say:

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said there is now an “urgent need for the Government to create the conditions that will attract large-scale battery manufacturing to the UK and transform our supply chains”.

“Improving the competitiveness of the UK will be essential to help mitigate the additional costs and burdens brought about by our new trading relationship,” he said.

A Nissan spokesman said the company welcomed agreement with the EU.

Trade

What was agreed

A key element of the trade deal is that it does not include any tariffs on exports to the EU.

Negotiators agreed automatic tariff-free access to the EU’s single market, and a zero quota agreement means there is no limit on the quantity of any type of goods that can be traded.

What the Government says:

The Government claims this is a better deal than the EU has negotiated with any other “third country”. On Christmas Eve, Boris Johnson called it a “Canada plus plus” arrangement, a reference to the fact that the UK products will face fewer tariffs and trade barriers than Canadian goods.

What the critics say:

Some barriers to trade do remain. Clement Beaune, the French Europe minister, has said “no country in the world will be subject to as many export rules as the UK”.

Politicians who opposed Brexit in 2016 said the trade landscape would still be more challenging than staying in the EU. Nicola Sturgeon, the Scottish First Minister, said leaving the bloc was happening “against Scotland’s will”.

Security and policing

What has been agreed

The UK will share DNA, fingerprint and vehicle data with the EU to help law enforcement agencies and border force to identify criminals.

The deal will also “streamline” extraditions from Britain to the EU, although extraditions will be more difficult after January 1 than when the UK was a member state.

What the Government says:

A senior official said the security agreement with the EU was “surprisingly extensive”, and described the arrangement as an “amazing achievement”.

Priti Patel, the Home Secretary, has said the deal will allow ministers to “seize [an] historic opportunity to make the UK safer”.

The National Crime Agency said it welcomes the deal, which will allow it to “retain access to the majority of EU law enforcement criminal justice tools that benefit law enforcement across Europe”.

What the critics say:

Lord Ricketts, a former national security advisor, said the deal was “better than I had feared” but warned: “Cooperation will be still be slower [and] more clunky than now”

The level playing field

What has been agreed

The level playing field was one of the most controversial parts of the negotiations and overseas how the UK and EU will manage different standards on goods if the UK diverges from the regulatory alignment it currently has with member states.

The UK objected to the EU’s suggestion that the bloc should be allowed to impose tariffs on British goods if the standards diverge. Under the terms of the agreement, both sides can impose tariffs but they must be agreed by an independent arbitration panel.

What the Government says:

The UK says it is important for post-Brexit sovereignty that tariffs cannot be imposed unilaterally by the European Union. A UK official pointed to arbitration panels on other trade deals, which are comprised of independent experts and lawyers, and stressed there would be no involvement of the European Court of Justice, an EU body.

What the critics say:

Senior Tory Brexiteers suggested they had no specific objection to the level playing field arrangements. One told The Telegraph there were no “big, big, problems” with the arrangement and Conservative MPs were pleased about the exclusion of the ECJ from any arbitration.

Northern Ireland

What has been agreed

The role of Northern Ireland after the end of the transition period is not a specific matter for the Brexit deal, and the country is mentioned just 54 times in the 1,246 pages of the trade agreement.

Instead, separate agreements on the management of the passage of goods from England, Scotland and Wales, through Northern Ireland into the single market in the Republic are being managed by Michael Gove.

What the Government says: 

A senior negotiator said the Withdrawal Agreement set up “different arrangements for trading goods and on one or two other things” in Northern Ireland.

The UK says the people of Northern Ireland will be able to choose what happens to the country after 2024 through a vote in the Northern Irish Assembly on the Protocol negotiated by Michael Gove.

What the critics say:

John Redwood, a Tory Brexiteer backbencher, said the Government should publish more information about the effect of the deal on Northern Ireland. “We need a detailed text to see how [Michael Gove] thinks it is going to work,” he tweeted.

Erasmus scheme

What has been agreed

The UK will leave the Erasmus scheme after the end of the transition period. This means UK students will no longer be able to use the scheme to travel to European universities on exchange programmes.

Boris Johnson announced the UK will replace Erasmus with its own scheme named after Alan Turing, which will enable students to travel all over the world, not just to Europe.

What the Government says:

The UK says the Erasmus scheme was disproportionately expensive for the UK, and cost the Treasury “hundreds of millions of pounds” every year because more European students wanted to travel to the UK than UK students wanted to travel to the EU.

The replacement scheme has yet to be established, so there is likely to be some delay before Erasmus is properly replaced.

What the critics say:

Michel Barnier, the EU’s chief negotiator, said the UK’s withdrawal from Erasmus was one of his biggest regrets about the outcome of the negotiations, while Lord Ricketts said the decision to withdraw from the scheme was “short-sighted and mean-spirited”.

Others pointed out that Boris Johnson previously promised there would be “no threat to the Erasmus scheme” as a result of Brexit.

Governance

What has been agreed

Independent arbitration panels will deal with potential conflict in future years over elements of the Treaty.

A senior negotiator said there was an established precedent for panels to oversee international agreements such as the trade deal. Members of the panel could involve senior members of the judiciary.

What the Government says:

David Frost, the Government’s chief negotiator, said EU law would no longer apply to the UK.

“The way we’ve achieved that is there’s no more role for the European Court of Justice, there’s no direct effects of EU law, there’s no alignment of any kind, and we’re out of the single market and out of the customs union just as the manifesto said we would be,” he said.

What the critics say:

Sir Bill Cash, a veteran Tory Eurosceptic, said the sovereignty of the UK was the most important element of the treaty. “Sovereignty is the key issue. The ECJ (European Court of Justice) is part of that,” he said.

Sir Bill is chairing the European Research Group’s “Star Chamber” group of lawyers to analyse the deal.

Gibraltar

Gibraltar is not part of the Brexit trade deal because of opposition from the Spanish government to the island being included within its negotiating mandate.

The Gibraltan economy hinges on the easy transport of people and goods from Spain, the island’s closest neighbour, and politicians on both sides are concerned about the effect of trade barriers and the loss of freedom of movement. Spain and the UK have not yet reached an agreement on what will happen next.

What the Government says:

“It’s always been clear from the start that it is not part of the mandate on the EU side for this negotiation, and we always knew we would have to do it in a different way.

“Those negotiations are going on but so far they have not reached an outcome.”

What the critics say:

Fabian Picardo, the Gibraltar government chief, said the “clock is still ticking” on negotiations but added he was “optimistic that we will be able to finalise that agreement”.

“We are looking for an accord that will allow maximum fluidity,” he said.

Farming

What has been agreed

Zero tariff and quota-free access to the single market means UK farming exporters will be able to continue largely as before, but will face additional paperwork and checks on their products entering the EU.

More than 60 per cent of the UK’s agricultural food and drink production (known as agrifoods) are exported to the EU. The bloc is the largest trading partner of British farmers.

The deal does not apply to seed potato crops, meaning they cannot be exported.

What the Government says:

Boris Johnson welcomed the tariff-free agreement in general, but did not address the issue with seed potato crops.

A letter from the Department for Environment, Food and Rural Affairs told farmers: “The EU have confirmed they will not accept our case for a permanent change to the prohibition on seed potatoes … on the grounds that there is no agreement for GB to be dynamically aligned with EU rules”.

What the critics say:

The National Farmers Union said the industry would face a “fundamental change at the end of the transition period” and expected there to be “disruption to trade at the border”.

Nicola Sturgeon accused the UK Government of selling out Scottish seed potato farmers, calling the deal a “disastrous outcome”.

Financial services

What has been agreed

The Brexit deal published by the Government and European Commission makes little reference to financial services.

Further negotiations will be allowed to establish market access for UK firms, which represent Britain’s largest sector.

It is expected that firms will be able to continue to trade without much disruption, but specific elements of the agreement will be addressed in a “memorandum of understanding”, which has yet to be published.

What the Government says:

In a summary of the deal, the UK Government said agreement reaffirms “the integrity of our respective, autonomous equivalence frameworks”.

The agreement also lays the groundwork for continued “market integrity,” officials said.

What the critics say:

Omar Ali, the head of financial services at EY, said firms had prepared well but warned there would be costs to UK firms if there is not equivalence between the UK and EU after the end of the transition period

“Equivalency isn’t just about access; it’s about the cost of doing business,” he warned.

“A lack of equivalence decisions would increase the cost of doing business for financial services firms and the clients they serve.”