REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation and application of the Trade and Cooperation Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland 1 January – 31 December 2021
Date: 2022-03-24
Institutions: European Commission, Secretariat-General
Subjects: EAEC, United Kingdom, application of EU law, cooperation agreement (EU), cooperation policy, trade agreement, trade agreement (EU)

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.3.2022  COM(2022) 126 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation and application of the Trade and Cooperation Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland  1 January – 31 December 2021  
 
 
Report from the European Commission to the European 
Parliament and the Council on the implementation and 
application of the Trade and Cooperation Agreement 
between the European Union and the United Kingdom of 
Great Britain and Northern Ireland 
1 January – 31 December 2021 

 
 
 
 
Contents 

1. 

2. 

Introduction .................................................................................................................................... 3 

Institutional framework .................................................................................................................. 4 

3.  Enforcement tools and dispute settlement .................................................................................... 5 

4.  Trade in goods ................................................................................................................................. 6 

5. 

Services and investment, digital trade, intellectual property, public procurement and small and 
medium-sized enterprises ............................................................................................................. 10 

6.  Energy ............................................................................................................................................ 14 

7. 

Level playing field for open and fair competition and sustainable development ........................ 14 

7.1.  Labour and social standards, environment and climate, sustainable development ............ 15 

7.2.  Subsidy control ...................................................................................................................... 16 

8.  Transport ....................................................................................................................................... 17 

9. 

Fisheries ........................................................................................................................................ 17 

10.  Social security coordination .......................................................................................................... 18 

11.  Law enforcement and judicial cooperation in criminal matters ................................................... 18 

12.  Participation in EU programmes ................................................................................................... 19 

13.  Conclusions ................................................................................................................................... 19 

 
 
 
 
 
1. 

Introduction 

The  Trade  and  Cooperation  Agreement  (TCA)  between  the  European  Union  (EU)  and  the 
European  Atomic  Energy  Community,  of  the  one  part,  and  the  United  Kingdom  of  Great 
Britain  and  Northern  Ireland  (United  Kingdom),  of  the  other  part1  was  signed  on 
30 December 2020. It took provisional effect on 1 January 2021. Following the completion of 
the ratification processes in the EU and the United Kingdom, it formally entered into force on 
1 May 2021. 

The  TCA  establishes  a  comprehensive  basis  for  the  relationship  between  the  parties  in  a 
broad  range  of  areas  including  trade,  transport,  fisheries,  law  enforcement  and  judicial 
cooperation  in  criminal  matters,  thematic  cooperation  and  participation  in  EU  programmes. 
It is  underpinned  by  provisions  ensuring  a  level  playing  field,  sustainable  development  and 
respect for fundamental rights, as well as arrangements on governance and dispute settlement. 

Among the EU free trade agreements with non-EU countries, the TCA is unique in that it was 
concluded with a former Member State. As a result, the conditions for trade and cooperation 
established by the TCA became more restricted than those that had been in place until the end 
of  2020,  when  the  transition  period  set  out  in  the  Withdrawal  Agreement2  came  to  an  end. 
This is an inevitable consequence of the United Kingdom leaving the EU Customs Union and 
the single market. 

The EU’s objective is to establish a stable and positive relationship with the United Kingdom. 
While good progress was achieved in setting up the structures for cooperation set out in the 
TCA,  some  challenges  remain.  There  are  also  persisting  difficulties  on  the  broader 
relationship with the United Kingdom, particularly those related to the implementation of the 
Protocol on Ireland and Northern Ireland under the Withdrawal Agreement. 

This is the first report on the TCA's implementation and application, as required by Article 
2(4) of Council Decision (EU) 2021/689 of 29 April 2021.3 The report presents the state of 
play in relation to a range of areas covered by the TCA during the first year of its application. 
The report also seeks to quantify the effect of the TCA with data, where available.  

1   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 
(OJ L 149/10) https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:22021A0430(01)&from=EN  

2   Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the 

European Union and the European Atomic Energy Community (2019/C 384 I/01) https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12019W/TXT(02)&from=EN  

3   Council Decision (EU) 2021/689 of 29 April 2021 on the conclusion, on behalf of the Union, of the 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, and of the 
Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland 
concerning security procedures for exchanging and protecting classified information (OJ L149/2) https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021D0689&from=EN  

3 

 
 
                                                           
2. 

Institutional framework 

The  TCA  creates 
its 
implementation.  This  structure  was  successfully  put  in  place  in  2021  and  is  now  fully 
operational. 

to  supervise  and  facilitate 

institutional  framework 

its  own 

The Partnership Council, which supervises the implementation of the TCA at political level, 
met  for  the  first  time  on  9  June  2021.  The  parties  discussed  among  others  fisheries,  non-
discrimination  for  work  visa  fees,  law  enforcement  and  judicial  cooperation,  as  well  as  the 
United Kingdom’s participation in EU programmes.4 However, a joint statement could not be 
agreed due to the United Kingdom’s refusal to have a reference to the full implementation of 
the Withdrawal Agreement as a prerequisite for a solid future relationship.5 

All  the  joint  bodies  assisting  the  Partnership  Council  in  matters  covered  by  the  TCA, 
including  the  Trade  Partnership  Committee  and  the  11  trade  specialised  committees,  which 
support its work in specific areas, held meetings during 2021:  

  Specialised Committee on Social Security Coordination (6 July 2021); 
  Specialised Committee on Energy (14 July 2021); 
  Specialised Committee on Fisheries (20 July and 27 October 2021); 
  Trade Specialised Committee on Sanitary and Phytosanitary Measures  

(22–23 September 2021); 

  Trade Specialised Committee of Customs Cooperation and Rules of Origin  

(7 October 2021); 

  Trade Specialised Committee on Goods (8 October 2021); 
  Trade Specialised Committee on Services, Investment and Digital Trade  

(11 October 2021); 

  Trade Specialised Committee on Public Procurement (12 October 2021); 
  Trade Specialised Committee on Level Playing Field for Open and Fair Competition 

and Sustainable Development (12 October 2021); 

  Trade Specialised Committee on Intellectual Property (13 October 2021); 
  Trade Specialised Committee on Regulatory Cooperation (13 October 2021); 
  Specialised Committee on Air Transport (14 October 2021); 
  Trade Specialised Committee on Technical Barriers to Trade (15 October 2021); 
  Specialised Committee on Law Enforcement and Judicial Cooperation  

(19 October 2021); 

  Trade Partnership Committee (16 November 2021); 
  Specialised Committee on Aviation Safety (23 November 2021); 
  Specialised Committee on Road Transport (24 November 2021); 
  Trade  Specialised  Committee  on  Administrative  Cooperation  in  VAT  and  Recovery 

of Taxes and Duties (15 December 2021); and 

  Specialised Committee on Participation in Union Programmes (21 December 2021). 

4   Agendas and minutes of the meetings of the Partnership Council and the committees: 

https://ec.europa.eu/info/strategy/relations-non-eu-countries/relations-united-kingdom/eu-uk-trade-and-
cooperation-agreement/meetings-eu-uk-partnership-council-and-specialised-committees-under-trade-and-
cooperation-agreement_en  

5   The European Commission’s statement following the first meeting of the Partnership Council: 
https://ec.europa.eu/info/sites/default/files/20210609_unilateral_pc_statement_002_final.pdf  

4 

 
 
                                                           
In  line  with  the  agreed  arrangements,  the  EU  was  represented  in  these  meetings  by  the 
European Commission, whereas positions to be taken on behalf of the EU were coordinated 
with  the  Council.  Member  States’  representatives  joined  the  meetings  as  part  of  the  EU 
delegation. The European Parliament was informed of the joint bodies’ activities.  

Steps were also taken to establish parliamentary cooperation between the EU and the United 
Kingdom.  The  parties  agreed  that  the  Parliamentary  Partnership  Assembly  (the  Assembly) 
established  in  the  TCA  would  consist  of  35  Members  of  the  European  Parliament  and  the 
United  Kingdom’s  parliament  respectively.  The  EU  delegation  to  the  Assembly  was 
approved in October 2021.6 The Assembly will begin its work in 2022.  

The  process  of  involving  civil  society  in  the  implementation  of  the  TCA  has  also  begun. 
The Civil Society Forum’s operational guidelines were informally agreed by the Commission 
and the United Kingdom. These guidelines need to be endorsed by the Partnership Council in 
order for the Civil Society Forum to start work.7 The EU Domestic Advisory Group was also 
set  up  to  enable  a  broader  dialogue  on  the  matters  covered  by  the  TCA.  The  Domestic 
Advisory  Group  is  supported  by  the  European  Economic  and  Social  Committee,  which 
coordinates meetings and maintains contacts with civil society partners. The first meeting of 
the Domestic Advisory Group took place on 25 November 2021.8 

3. 

Enforcement tools and dispute settlement 

In  response  to  requests  from  the  Member  States,  the  Commission  set  up  a  central  point9 
allowing  stakeholders  to  register  complaints  related  to  the  implementation  of  the  TCA. 
Businesses,  NGOs,  employers,  trade  unions  and  the  general  public  in  the  EU  can  use  this 
system as a first point of entry to report problems related to the implementation of the TCA. 
The central point is linked with the existing tools developed by the Commission, such as the 
single  entry  point  for  registering  trade-related  complaints,  including  market  access  issues, 
level  playing  field  or  sustainable  development.  These  tools  reflect  the  Commission’s 
increased  efforts  to  strengthen  the  enforcement  and  implementation  of  its  international 
agreements. 

Furthermore, to be able to trigger enforcement measures, the Commission  made proposals10 
to  govern  the  adoption  of  unilateral  and  enforcement  measures,  which  would  replace  the 

6   See: https://www.europarl.europa.eu/doceo/document/TA-9-2021-0398_EN.pdf  
7   Information on the meetings of the Civil Society Forum will be available at 

https://trade.ec.europa.eu/dialogue/index.cfm  

8   https://www.eesc.europa.eu/en/tags/international-trade?page=1  
9   https://ec.europa.eu/assets/sg/complaint_eu_uk_tca/complaints_en/  
10  Proposal for a Regulation of the European Parliament and of the Council laying down rules for the exercise 
of the Union's rights in the implementation and enforcement of the Agreement on the withdrawal of the 
United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic 
Energy Community and of the 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, COM(2022) 89; and Proposal for a Council Regulation laying down rules 
for the exercise of the Community's rights in the implementation of the 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, COM(2022) 100.  

5 

 
 
                                                           
empowerment provided for in the Council Decision (EU) 2021/68911 on the conclusion of the 
TCA. 

In 2021, neither party requested consultations or the establishment of an  arbitration tribunal 
under  the  rules  on  dispute  settlement  of  the  TCA.  As  part  of  the  implementation  of  these 
rules, the EU formally proposed, on 14 December 2021, individuals who are willing and able 
to serve as members of an arbitration tribunal.12  

4. 

Trade in goods 

At the end of the transition period, the United Kingdom  and the EU split into two separate 
customs territories, and two separate markets for goods, each with its own regulatory regime, 
inevitably creating barriers to trade. 

Although the TCA provides for trade without tariffs and quotas on all imports between  the 
parties,  frictionless  trade  in  goods  ended  and  non-tariff  barriers  re-emerged.  As  of  2021, 
all exports from the United Kingdom to the EU are subject to customs procedures and checks. 
Agri-food consignments must be accompanied by health certificates and undergo sanitary and 
phytosanitary (SPS) inspections at Member States' border control posts. In addition, all goods 
need  to  comply  with  different  rules  and  regulatory  measures,  as  the  principle  of  mutual 
recognition ceased to apply. 

Furthermore,  goods  traded  between  the  two  parties  must  comply  with  the  rules  of  origin 
established in the TCA if they are to benefit from preferential treatment with 0% of customs 
duties.  Proving  the  origin  of  a  good  can  be  burdensome,  particularly  if  businesses  source 
components  from  several  countries.  To  ease  the  uptake  of  preferential  treatment,  the 
Commission adopted legislation13 establishing a transitory period during which EU exporters 
could  issue  statements  on  origin  based  on  suppliers’  declarations,  even  in  the  absence  of 
complete documentation, provided that they  would have it by the end of 2021. As of 2022, 
standard  requirements  to  make  out  statements  on  origin  apply.  On  EU  imports  from  the 
United Kingdom, over 80% of goods benefitted from preferential treatment. The Commission 
together with the Member States ensures the correct implementation of the rules of origin and 
provides guidance and explanations to customs authorities and businesses. 

Despite there being no customs duties on originating goods, businesses reported widely about 
disruptions in supply chains. The difficulties faced by EU businesses are consistent with what 
could be expected, namely:  

11   Council Decision (EU) 2021/689 of 29 April 2021 on the conclusion, on behalf of the Union, of the 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, and of the 
Agreement between the European Union and the United Kingdom of Great Britain and Northern Ireland 
concerning security procedures for exchanging and protecting classified information (OJ L149/2) https://eur-
lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021D0689&from=EN) 

12   https://ec.europa.eu/info/system/files/ares_20217728182_letter_from_vice-

president_sefcovic_to_the_united_kingdom_minister_of_state_lord_frost_signed.pdf 

13   Commission Implementing Regulation (EU) 2020/2254 of 29 December 2020 on the making out of 

statements on origin on the basis of supplier’s declarations for preferential exports to the United Kingdom 
during a transitory period (OJ L446/1) https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32020R2254&from=EN  

6 

 
 
                                                           
 

increased  costs  because  of  having  to  comply  with  dual  regulatory  systems  and 
additional formalities;  

  delays at the border due to new procedural requirements; and  
  difficulty in complying with changing import rules.  

The Commission made every effort  to  assist  Member States and  EU businesses to  navigate 
the  new  environment.  For  instance  as  regards  SPS  requirements,  where  certain  problems 
occurred at the beginning of 2021, guidance on the correct application of the SPS rules was 
provided promptly. In the area of customs, guidance on the rules of origin and other customs 
related issues was published together with check lists and other relevant information.14 As a 
result, the number of issues in both areas significantly dropped as the year progressed. For its 
part,  the  United  Kingdom  repeatedly  postponed  the  implementation  of  customs  and  SPS 
requirements on imports from the EU in 2021. The implementation of these formalities began 
in January 2022 and will be phased in until October 2022, according to the staged approach 
defined  in  the  Border  Operating  Model.  Their  application  may  be  challenging  for  EU 
exporters and Member States due to the logistical impact of the new procedures, in particular 
the need to submit required declarations and supporting documents before goods are shipped 
from EU ports to the United Kingdom, as well as the complexity of the IT system put in place 
by the United Kingdom.  

The Commission is in close contact with Member States to ensure that their administrations 
and  businesses  are  well  prepared.  The  relevant  information  is  also  available  on  the 
Commission’s  website.15  To  facilitate  trade  in  goods  that  fall  under  SPS  requirements, 
electronic  model  health  certificates  required  for  exports  to  Great  Britain  have  been  made 
available to all Member States and the Commission engaged in discussions with the United 
Kingdom’s authorities on their acceptance. 

While  it  is  still  too  early  to  assess  the  full  economic  impact  of  the  United  Kingdom’s  exit 
from the EU single market, latest data shows that trade flows between the EU and the United 
Kingdom  have  partially  stabilised  in  2021  after  an  initial  drop  following  the  end  of  the 
transition period. However, they remained lower than in 2019 and earlier.  

On  trade  in  goods,  Eurostat  estimates,  for  2021,  EUR  146  billion  of  EU  imports  from  the 
United Kingdom which is a marked decline both compared to 2020 (-13.6%) and to 2019 (-
24.8%).  EU  exports  to  the  United  Kingdom  are  estimated  at  EUR  283  billion,  up  by  1.9% 
compared to 2020 but still 11.4% below the level registered in 2019. 

Table 1 shows that both EU imports and exports of goods with the rest of its partners sharply 
rose  in  2021  compared  to  2020  (+27%  and  +14.6%  respectively)  and  above  the  2019,  pre-
pandemic,  levels  (12.5%  for  imports  and  4.7%  for  exports)  while  trade  with  the  United 
Kingdom is still far from its pre-pandemic levels. 

Machinery and transport equipment, which represent a relevant share of bilateral trade were 
particularly affected. EU imports from the United Kingdom in this sector contracted by 
26.2% in 2021 compared to 2020 and by 37.9% compared to 2019. EU exports contracted by 
3.1% in 2021 relative to 2020 and 20.5% relative to 2019. In absolute terms, EU imports and 

14   https://ec.europa.eu/taxation_customs/customs-4/international-affairs/third-countries/united-kingdom_en 
15   https://ec.europa.eu/taxation_customs/customs-4/international-affairs/third-countries/united-kingdom/new-

import-formalities-bring-goods-eu-uk-1-january-2022_en 

7 

 
 
                                                           
exports in machinery and transport equipment with the United Kingdom, in 2021, was more 
than EUR 52 billion below the level recorded in 2019.16

16   Statistics measuring EU trade with the United Kingdom were affected by a major change as of 1 January 

2021, when survey-based statistics used to measure intra-EU trade were replaced by customs-based statistics 
measuring country of origin rather than country of consignment. It is likely that (a part of) the losses in EU 
trade with the United Kingdom were compensated by gains in trade with other non-EU countries. At this 
stage, it is not possible to quantify this statistical effect. 

8 

 
 
                                                           
Table 1. EU27 Merchandise trade in 2021 by partner and SITC sector compared to previous years 

EU27 trade by partner 
UK 
Extra-EU27 (excl. UK) 
EU27 trade by SITC sector 
0 - Food and live animals 
1 - Beverages and tobacco 
2 - Crude materials, inedible, except fuels 
3 - Mineral fuels, lubricants and related materials 
4 - Animal and vegetable oils, fats and waxes 
5 - Chemicals and related prod, n.e.s. 
6 - Manufactured goods classified chiefly by material 
7 - Machinery and transport equipment 
8 - Miscellaneous manufactured articles 
9 - Commodities and transactions n.c.e.  
EU27 trade by SITC sector   
0 - Food and live animals 
1 - Beverages and tobacco 
2 - Crude materials, inedible, except fuels 
3 - Mineral fuels, lubricants and related materials 
4 - Animal and vegetable oils, fats and waxes 
5 - Chemicals and related prod, n.e.s. 
6 - Manufactured goods classified chiefly by material 
7 - Machinery and transport equipment 
8 - Miscellaneous manufactured articles 
9 - Commodities and transactions n.c.e. 

Source : Eurostat  EXT_ST_EU27_2020SITC 18-Feb-22 

EU imports 

% change compared to 

EU exports 

% change compared to 

2021 million € 

2020 

2019 

2021 million € 

2020 

2019 

TOTAL All products 

  146,025     
1,965,514     

-13.6 
27.0 

-24.8 
12.5 
Partner : United Kingdom 

      283,589     
   1,896,887     

       9,444     
       2,637     
     4,349     
20,913     
451     
26,286     
16,274     
42,823     
13,917     
8,931     

98,296     
6,599     
87,727     
359,916     
13,458     
244,176     
222,081     
627,878     
272,572     
32,811     

-26.8 
-9.8 
34.1 
37.8 
-21.4 
-20.8 
-0.3 
-26.2 
-36.0 
83.0 

8.2 
4.2 
34.3 
74.6 
27.2 
22.1 
26.8 
18.5 
17.8 
1.2 

-31.5 
-23.5 
22.9 
-6.5 
-6.3 
-20.6 
-11.9 
-37.9 
-44.3 
72.7 

        31,716     
          6,269     
          9,535     
        10,775     
          1,034     
        45,316     
        35,604     
      102,872     
        33,592     
          6,877     

Partner : Extra-EU27 (excl UK) 

5.1 
-3.1 
29.5 
5.6 
48.7 
20.9 
24.0 
10.3 
8.2 
24.9 

      103,475     
        34,035     
        53,542     
        93,312     
          6,642     
      410,917     
      203,994     
      727,950     
      223,366     
        39,655     

1.9 
14.6 

-4.5 
5.1 
53.9 
92.6 
2.6 
2.8 
11.8 
-3.1 
-8.3 
-9.6 

5.9 
15.5 
32.2 
59.5 
20.0 
12.0 
18.4 
11.3 
16.7 
2.1 

-11.4 
4.7 

-3.9 
7.3 
55.3 
6.9 
9.7 
-6.8 
-1.7 
-20.5 
-22.1 
1.3 

12.2 
6.7 
26.8 
-0.1 
32.9 
14.7 
5.8 
-1.9 
4.4 
-1.3 

9 

 
 
 
  
  
  
  
 
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
  
5. 

Services and investment, digital trade, intellectual property, public 
procurement and small and medium-sized enterprises 

With the end of the transition period, the free movement of persons, as well as the freedom to 
provide services, capital movement and of establishment came to an end, resulting in a major 
change to the way both parties' service providers are able to access each other's markets. The 
provision of services, which now takes place on a non-EU country basis, has become more 
challenging.  Businesses  planning  to  deliver  services  or  investors  willing  to  establish 
themselves in the other party's territory face new regulatory and administrative barriers. For 
instance,  authorisations  from  the  home  country  are  no  longer  valid  in  the  host  country, 
professional  qualifications  are  not  as  easily  recognised  as  they  are  within  the  EU  and 
immigration rules apply. For United Kingdom service providers and investors different rules 
for each of the 27 Member States apply.  

Although  the  TCA  contains  provisions  reducing  certain  access  barriers,  for  example  by 
prohibiting  quantitative  restrictions  such  as  economic  needs  tests  for  investors  and  service 
providers  or  providing  for  a  possibility  to  recognise  professional  qualifications,17  the  TCA 
framework  does  not  compare  with  the  freedoms  of  establishment  or  to  provide  services 
within  the  single  market.  The  TCA  also  provides  for  the  facilitation  of  digital  trade  and 
enhanced  standards  on  the  protection  of  intellectual  property,  as  well  as  rules  on  access  to 
respective public procurement markets.  

Data for the first three quarters of 2021 show that trade in services did not return yet to  pre-
pandemic levels. Table 2 shows that despite the rebound relative to the first nine months of 
2020,  EU  imports  from  the  United  Kingdom  and  from  the  rest  of  its  trading  partners  are 
much lower than in the same period in 2019, -9.3% from the UK and -8% relative to the rest 
of the world. When comparing EU exports in the first three quarters of 2021 with those in the 
same period of 2019, the drop is more significant for the United Kingdom (-13.2%) than for 
the rest of the EU trading partners (-4.8%). 

Showing no signs of recovery relative to 2020, the travel sector is one of the most affected. 
EU imports and exports with both the United Kingdom and the rest of its trading partners, in 
the first nine months of 2021 are still far from the levels of the same period in 2019.  

Trade  in  Transport  services,  Construction  services  and  Charges  for  the  use  of  intellectual 
property  are  also  heavily  affected  but  this  mostly  applies  to  trade  between  the  EU  and  the 
United Kingdom, trade  between the EU and its  other trading partners is  now exceeding the 
levels  recorded  in  the  first  nine  months  of  2019.  This  is  indicative  of  the  effect  of  the 
withdrawal of the United Kingdom from the EU. 

Throughout 2021, the Commission concentrated its efforts on overcoming obstacles related to 
implementing  the  TCA.  For  instance,  it  was  possible  to  clarify  the  United  Kingdom 
immigration  rules  regarding  subcontractors'  right  to  perform  installation  and  maintenance 
services in its territory.  

For  its  part,  the  Commission  complied  with  the  transparency  obligations  under  the  TCA. 
Information  on  the  provision  of  services  by  natural  persons  is  now  publicly  available. 

17   Both parties' professional bodies can call upon the Partnership Council to approve recognition in their sector. 

10 

 
 
                                                           
The Commission  also  met  its  obligation  to  develop  a  public  website  with  information  on 
SMEs.18  

The  Commission  will  continue  to  monitor  the  implementation  of  the  TCA  in  services  and 
investment,  digital  trade,  intellectual  property,  public  procurement  and  SMEs  and  insist  on 
complying with the TCA. It will follow up with the relevant United Kingdom’s authorities on 
future  public  procurement  legislation19,  which  has  raised  concerns  among  EU  stakeholders. 
The  Commission  will  also  continue  to  closely  monitor  the  impact  of  other  legislative 
developments in the United Kingdom, affecting the matters covered by the TCA. 

18   https://trade.ec.europa.eu/access-to-markets/en/home  
19   See: https://www.gov.uk/government/consultations/green-paper-transforming-public-

procurement/outcome/transforming-public-procurement-government-response-to-consultation 

11 

 
 
                                                           
 
Table 2. EU27 Services trade in the first 9 months of 2021 by partner and service sector compared to the same period in previous years 

EU imports 
Jan-Sept 2021 
Million € 

% change compared 
to Jan-Sept 
2020 

2019 

EU exports 
Jan-Sept 2021 
Million € 

% change compared 

to Jan-Sept 
2020 

2019 

EU27 trade by partner   
UK  
Extra-EU27 (excl. UK) 

EU27 trade by services sector 

Manuf. services on physical inputs owned by others 

Maintenance and repair services n.i.e. 

Transport 

Travel 

Construction 

Insurance and pension services 

Financial services 

Charges for the use of intellectual property n.i.e. 

Telecommunications, computer, and information services 

Other business services 

Personal, cultural, and recreational services 

Government goods and services n.i.e. 

Services not allocated 

EU27 trade by services sector 

Manuf. services on physical inputs owned by others 

Maintenance and repair services n.i.e. 

Transport 

Travel 

Construction 

Insurance and pension services 

Financial services 

Charges for the use of intellectual property n.i.e. 

Telecommunications, computer, and information services 

114,858 
499,174     

1,349 

1,414     

9,101     

3,934     

1,339     

6,342     

20,121     

9,061     

14,181     

44,670     

2,990     

258     

101     

11,556     

8,427     

96,165     

26,230     

2,371     

12,707     

38,530     

104,010     

43,818     

3.9 
-4.4 

1.8 

-6.2 

-7.9 

-33.0 

-5.6 

25.4 

22.8 

4.0 

2.9 

4.0 

4.4 

-55.6 

-39.4 

TOTAL All services 

-9.3 
-8.0 

143,253     
574,356     

Partner : United Kingdom 

-8.7 

-27.6 

-27.4 

-71.9 

-51.4 

37.8 

19.8 

-21.8 

8.3 

2.5 

-11.5 

-64.5 

-27.4 

3,721     

1,792     

15,534     

9,912     

1,599     

8,487     

22,693     

7,267     

27,357     

38,337     

2,798     

822     

2,936     

Partner : Extra-EU27 (excl. UK) 

10.5 

-8.4 

20.4 

-11.3 

1.3 

18.4 

22.7 

21.6 

11.6 

14.5 

-17.3 

1.8 

-63.6 

-0.3 

20.6 

32.9 

38.4 

8.2 

16,907     

11,019     

126,803     

32,400     

5,205     

11,094     

42,347     

51,547     

119,666     

140,995     

Other business services 

148,391     

-31.3 

-21.8 

6.4 
12.3 

-3.1 

-19.5 

4.0 

-9.7 

-12.8 

35.4 

12.1 

8.6 

9.7 

4.8 

15.8 

13.2 

-1.0 

12.4 

-0.9 

31.8 

-4.5 

-16.5 

-0.4 

11.3 

-1.8 

22.0 

4.8 

-13.2 
-4.8 

-2.9 

-24.9 

-24.9 

-70.2 

-57.7 

55.8 

11.9 

-8.4 

14.7 

1.8 

8.1 

13.5 

13.3 

8.5 

-11.1 

8.0 

-66.4 

-28.3 

3.1 

13.5 

1.4 

22.1 

-1.2 

12 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal, cultural, and recreational services 

Government goods and services n.i.e. 

4,779     

1,984     

-2.2 

-11.9 

-12.6 

-14.1 

Services not allocated 
Source: Eurostat. European Union and euro area balance of payments - quarterly data (BPM6) - Extracted on 18 Feb. 2022 

208     

-52.8 

-50.0 

7,318     

3,738     

5,319     

5.9 

-18.3 

72.8 

-0.5 

-15.3 

63.2 

13 

 
 
 
 
  
 
 
 
6. 

Energy 

With the end of the transition period, the  United Kingdom no longer participates in the EU 
single  energy  market,  including  its  governance  and  its  trading  arrangements.  Although  the 
TCA  sets  out  provisions  to  ease  the  flow  of  energy,  trading  processes  have  become  more 
complicated.  

The  TCA  allows  for  the  development  of  special  trading  arrangements  for  electricity  flows 
between the EU and the United Kingdom. As a first step, both parties’ transmission system 
operators were requested to draw up a cost-benefit analysis. However, the analysis presented 
jointly in May 2021, delivered unsatisfactory results indicating among others a serious risk of 
market manipulation and disruption. The Commission is working on options and alternatives 
to implement this obligation.   

The  TCA  also  provides  for  cooperation  in  the  development  of  offshore  renewable  energy, 
which is due to play a key role in meeting both parties' net zero targets for their greenhouse 
gas  emissions.  Building  on  the  North  Sea  Energy  Cooperation,  negotiations  began  in  2021 
with  the  view  to  signing  a  Memorandum  of  Understanding  to  create  a  specific  forum  for 
technical discussions with the United Kingdom in relation to offshore grid development and 
the large renewable energy potential of the North Sea region.  

7. 

Level playing field for open and fair competition and sustainable 
development  

The  EU  and  the  United  Kingdom  agreed  in  the  TCA  that  trade  and  investment  require 
conditions  to  ensure  a  level  playing  field  and  sustainable  development.  In  this  regard,  any 
relevant developments in United Kingdom law on subsidy control, taxation, labour and social 
standards,  as  well  as  the  environment  and  climate  must  be  monitored  and  reported, 
as required by Article 2(4) of the Council Decision (EU) 2021/689. 

To  monitor  such  developments,  the  Commission  uses  information  gathered  by  its  services 
and Member States, input from EU stakeholders, formal and informal contacts in the context 
of international and multilateral fora, as well as specialised committees established under the 
TCA.  The  Commission  also  closely  monitors  the  development  of  regulatory  changes, 
analysing reports by think tanks, business, non-governmental organisations, media and other 
stakeholders. The single entry point20 established by the TCA also provides the Commission 
with information for its analyses. 

20   The Single Entry Point is the centralised contact point for EU-based stakeholders wishing to lodge a 
complaint on market access issues, level playing field or non-compliance with Trade and Sustainable 
Development or Generalised System of Preferences system commitments. More information may be found 
on https://ec.europa.eu/trade/trade-policy-and-you/contacts/chief-trade-enforcement-officer/  

14 

 
 
                                                           
7.1.  Labour and social standards, environment and climate, sustainable 

development  

Following  its  withdrawal  from  the  EU,  the  United  Kingdom  announced  wide-reaching 
regulatory  reform  as  part  of  its  ‘taking  back  control  of  our  laws’  ambition  and  launched  a 
public consultation on reforming the framework for better regulation.21 

In  labour  and  social  policy,  the  United  Kingdom  government  announced  its  intention  to 
establish  a  single  enforcement  body  for  employment  rights,  which  will  be  tasked  with 
ensuring centralised supervision of its labour laws.22 The Commission is closely following up 
this legislative development, in particular on the body’s powers and resources to carry out its 
enforcement role. Once the law enters into force, the Commission will closely monitor if the 
relevant  labour  and  social  standards  are  effectively  enforced,  as  required  by  the  TCA.  The 
Commission  and  the  United  Kingdom  discussed  this  issue  at  the  first  meeting  of  the 
Specialised  Committee  on  Level  Playing  Field  for  Open  and  Fair  Competition  and 
Sustainable  Development  where  both  parties  agreed  on  the  importance  of  the  effective 
enforcement of workers’ rights. 

The  United  Kingdom  also  adopted  the  Environment  Act  202123  setting  up  the  Office  for 
Environmental  Protection  and  addressing  specific  policy  aspects  related 
to  waste, 
biodiversity, air quality,  water  and conservation.  In this  instance, the Commission  will  also 
monitor  if  the  Office  is  provided  with  sufficient  powers  and  resources  to  be  able  to 
effectively  enforce  the  environmental  rules,  in  line  with  the  TCA  obligations.  Furthermore, 
the  Commission  will  pay  attention  to  the  effective  implementation  of  environmental 
commitments following the adoption of the act and the secondary legislation that will follow. 

The  EU  rules  regulating  the  chemical  sector  were  brought  into  the  United  Kingdom’s 
domestic law24 in 2021 with some adaptations resulting from the country’s withdrawal from 
the  EU.  The  Commission  is  closely  monitoring  the  United  Kingdom’s  approach  to 
restrictions,  authorisations  and  registrations  of  chemical  substances  to  ensure  compliance 
with the relevant TCA obligations. 

On climate protection, the United Kingdom introduced its own Emissions Trading Scheme.25 
The scheme applies to energy intensive industries, the power generation sector and aviation. 
It  covers  activities  involving  combustion  of  fuels  in  installations.  In  aviation,  the  scheme 
applies to flights within the United Kingdom, as well as those to Gibraltar and the European 
Economic Area. Since May 2021, the United Kingdom has been organising auctions related 
to trade in allowances. The clearing prices have so far been at levels comparable to or higher 
than those in the EU. 

21   Announcement of the regulatory reform of key sectors: https://www.gov.uk/government/publications/brexit-

opportunities-regulatory-reforms  

22https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/991751/sing

le-enforcement-body-consultation-govt-response.pdf  

23   https://www.legislation.gov.uk/ukpga/2021/30/contents/enacted 
24   https://www.hse.gov.uk/reach/index.htm 
25   https://www.gov.uk/government/publications/participating-in-the-uk-ets/participating-in-the-uk-ets  

15 

 
 
                                                           
Article 18(2) of European Social Charter26 requires the United Kingdom to abolish or reduce 
chancery dues, including work-related visa fees. Until recently, the United Kingdom applied 
a  reduction  of  GBP  55  on  long-term  visa  fees  to  all  workers  coming  from  the  states  that 
consented to the Charter open for signature in 1961. In December 2020, the United Kingdom 
announced  that  as  of  2021,  the  reduction  would  not  apply  to  nationals  of  five  EU  Member 
States.27  In  July  2021,  the  United  Kingdom  served  a  notice  of  its  intention  to  denounce 
Article  18(2)  of  the  European  Social  Charter.  In  September  2021,  the  United  Kingdom 
decided  to  remove  the  visa  fee  reduction  for  all  EU  citizens  as  of  February  2022.  The 
Commission raised this issue at the meetings of the Partnership Council and the Specialised 
Committee  on  Level  Playing  Field  for  Open  and  Fair  Competition  and  Sustainable 
Development. It expressed disappointment that the United Kingdom did not extend the visa 
fee  discount  to  citizens  of  the  five  EU  Member  States  concerned,  but  instead  decided  to 
remove the discount altogether. 

7.2.  Subsidy control 

In  June  2021,  the  United  Kingdom  government  tabled  a  Subsidy  Control  Bill28  aiming  to 
establish a legal framework for future subsidy oversight. The bill provides for substantive and 
enforcement rules. 

On the substantive rules, the bill provides for a definition of subsidy and a set of general and 
specific  subsidy  principles,  which  are  grounded  in  the  principles  laid  down  in  the  TCA,  as 
well as the provisions on transparency.  

On  enforcement,  the  bill  establishes  a  Subsidy  Unit  within  the  Consumers  and  Markets 
Authority, which will assume the role of an independent body with subsidy control powers. 
The  bill  provides  for  an  ex-post  subsidy  control  system  with  some  ex-ante  elements.  The 
Competition Appeal Tribunal will be able to impose a recovery order if a subsidy is granted 
unlawfully. It is expected that additional implementing rules and guidance will be issued. The 
Commission will continue to monitor developments. 

The  Commission  also  looks  into  the  subsidies  for  supporting  renewable  energy  under  the 
United  Kingdom’s  ‘Contracts  for  Difference’  scheme.29  The  Commission  expressed  its 
concerns  about  the  inclusion  of  ‘the  percentage  of  United  Kingdom  content’  in  the  supply 
chain  plan  questionnaire.  The  Commission  raised  this  issue  in  the  meetings  of  the  Trade 
Specialised  Committee  on  Goods  and  the  Trade  Specialised  Committee  on  Level  Playing 
Field  for  Open  and  Fair  Competition  and  Sustainable  Development,  as  well  as  the  Trade 
Partnership  Committee.  The  Commission  requested  the  United  Kingdom  to  remove 
information  on  local  content  from  the  questionnaire  and  adapt  the  scoring  of  the  eligibility 
criteria,  as  well  as  to  issue  additional  guidance  to  confirm  that  the  question  on  the  United 

26   The European Social Charter is a treaty concluded under the Council of Europe, which was opened for 
signature in 1961 and initially became effective in 1965. The Charter was revised in 1996. The Revised 
Charter came into force in 1999: 
https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent?documentId=09000016804
8b059  

27   Bulgaria, Estonia, Lithuania, Romania and Slovenia. 
28   https://www.gov.uk/government/collections/subsidy-control-bill  
29   https://www.gov.uk/government/publications/contracts-for-difference/contract-for-difference 

16 

 
 
                                                           
Kingdom  content  has  been  removed  and  would  not  be  scored  in  any  way,  including  in  the 
implementation stage, effectively removing any role for location.  

The  United  Kingdom  proposed  to  establish  eight  freeports30,  two  of  which  became 
operational  in  2021,  with  specific  rules  such  as  direct  tax  measures  (e.g.  tax  reliefs)  and 
simplified customs processes or subsidies supporting trade and investment. The Commission 
will  continue  to  monitor  their  setting-up  and  scrutinise  their  compliance  with  the  level 
playing field provisions in the TCA, especially those related to subsidies and taxation. 

8. 

Transport  

With  the  end  of  the  transition  period,  the  United  Kingdom  no  longer  benefits  from  the  EU 
single market in transport. Although the TCA provides for the rules maintaining connectivity 
between the EU and the United Kingdom, access rights of transport operators, in particular in 
aviation  and  road  transport,  fall  well  below  those  available  in  the  EU  single  market.  For 
instance, United Kingdom airlines can no longer offer regular air transport services between 
Member States.  

The  mutual  rights  agreed  by  the  parties  in  air  and  road  transport  started  to  be  immediately 
applied on the entry into force of the TCA and have so far been unproblematic. 

The  TCA  also  allows  for  the  possibility  of  concluding  bilateral  agreements  between  the 
Member  States  and  the  United  Kingdom  for  all-cargo  air  transport  services  under  the  so-
called ‘fifth freedom rights’.31 Based on the authorisation under Article 6 of Council Decision 
(EU)  2021/689,  the  following  Member  States  notified  to  the  Commission  their  agreements 
with  the  United  Kingdom  by  the  end  of  2021:  Luxembourg,  Malta,  France,  Slovakia, 
Germany,  Estonia,  Czech  Republic,  Finland,  Belgium,  Sweden,  Denmark,  Bulgaria, 
Hungary, Latvia, the Netherlands, Ireland, Cyprus, Greece and Lithuania.  

On  airworthiness  checks  for  aircraft,  engines  and  propellers  designed  in  their  territories,  as 
well  as  related  certification  processes,  15  validations  were  completed  in  2021,  mainly 
consisting of supplementary type certificates or changes to the existing designs. Of those, 13 
validations  were  granted  by  the  EU  Aviation  Safety  Agency  and  two  by  the  United 
Kingdom’s Civil Aviation Authority.  

9. 

Fisheries 

With  the  end  of  the  transition  period,  the  United  Kingdom  ceased  to  participate  in  the  EU 
common fisheries policy.  Although the TCA provides for  reciprocal  access  to  each  parties’ 
waters,  as  well  as  specific  rules  relating  to  access  to  the  waters  of  the  United  Kingdom’s 
Crown Dependencies during an adjustment period, fishing conditions for both parties’ fishers 
have substantially changed.  

The  Commission  secured  access  to  the  United  Kingdom’s  and  the  Crown  Dependencies’ 
waters  for  most  of  the  EU  fishing  fleet.  However,  ensuring  access  for  EU’s  smaller  and 

30   https://www.instituteforgovernment.org.uk/explainers/trade-freeports-free-zones  
31   The right or privilege, in respect of scheduled international air services, granted by one State to another State 
to put down and to take on, in the territory of the first State, traffic coming from or destined to a third State 

17 

 
 
                                                           
replacement vessels to the United Kingdom‘s territorial waters (6-12 miles) and the Channel 
Islands’ waters remained difficult. While significant progress was made, a number of vessels 
seeking  access  to  those  waters  had  not  received  a  licence  by  the  end  of  the  year.  The 
Commission  is  examining  together  with  the  concerned  Member  States  the  circumstances 
around every requested license, which has not been granted. 

The  parties  also  exchanged  notifications  of  all  new  management  measures,  as  required  by 
Article  496(3)  of  the  TCA.  Mutually  acceptable  timelines  and  procedures  for  such 
notifications will be developed by the Specialised Committee on Fisheries.  

The EU and the United Kingdom also held annual consultations on the management of shared 
stocks. An agreement on the total allowable catches for 2021 was reached in June 2021. An 
agreement on the total allowable catches for 2022 was reached in December 2021. 

10.  Social security coordination  

With  the  end  of  the  transition  period,  the  application  of  EU  mechanisms  on  social  security 
coordination in the United Kingdom came to an end. The TCA limits the negative impact by 
protecting  the  social  security  rights  of  people  moving  between  the  EU  and  the  United 
Kingdom  after  1  January  2021.  To  this  end,  it  allows  for  the  coordination  of  most  social 
security benefits. 

Cooperation  in  social  security  progressed  well  in  2021.  No  structural  problems  with  the 
implementation  of  the  Protocol  on  Social  Security  Coordination  under  the  TCA  were 
identified.  Furthermore,  amendments  to  the  annexes  of  the  Protocol  were  adopted  by  the 
Specialised  Committee  on  Social  Security  Coordination  to  confirm  that  Member  States 
continue  to  allow  workers  posted  to  or  from  the  United  Kingdom  to  be  covered  by  the 
sending State's social security legislation under specific conditions.  

11.  Law enforcement and judicial cooperation in criminal matters 

With the end of the transition  period,  the arrangements for  cooperation  in law enforcement 
and  judicial  cooperation  in  criminal  matters  between  the  EU  and  the  United  Kingdom 
changed.  For  instance,  mechanisms  based  on  mutual  recognition  were  replaced  by  mutual 
legal  assistance.  Moreover,  the  United  Kingdom  is  no  longer  a  member  of  the  EU  law 
enforcement  agencies  and  has  limited  or  no  access  to  EU  databases.  Although  the  TCA 
provides for cooperation between the parties, such cooperation is now carried out on a non-
EU country basis. 

In  2021,  operational  cooperation  with  Europol  and  Eurojust  continued,  albeit  on  a  non-EU 
country  status  and  subject  to  bilateral  arrangements.  To  this  end,  a  working  and 
administrative  arrangement  with  Europol  establishing  cooperative  relations  was  signed  on 
27 September 2021 and the working arrangement with Eurojust was signed on 20 December 
2021. 

The Specialised Committee on  Law Enforcement and Judicial  Cooperation, which oversees 
the  implementation  of  the  cooperation  arrangements  under  the  TCA,  extended  the  interim 
period  for  the  ex-ante  evaluation  of  the  United  Kingdom’s  DNA  and  fingerprints 

18 

 
 
connections.32 This interim period cannot be further extended beyond 30 June 2022, which is 
the date by which the United Kingdom’s connections must be evaluated.  

The TCA requires the United Kingdom to delete Passenger Name Record data received after 
passengers’ departure from the country unless a risk assessment indicates the need to retain 
such data. The United Kingdom was allowed to derogate from this obligation for an interim 
period  of  one  year  after  the  entry  into  force  of  the  TCA,  pending  the  implementation  of 
certain  technical  adjustments.  The  interim  period  was  due  to  end  on  31  December  2021. 
However,  on  21  December  2021,  the  Partnership  Council,  having  considered  information 
provided by the United Kingdom on the safeguards and actions taken in view of enabling the 
deletion  of  data  and  using  an  empowerment  under  Article  552(13)  of  the  TCA,  took  the 
decision  to  extend  the  interim  period  for  an  additional  year  in  view  of  special 
circumstances.33 

12.  Participation in EU programmes 

As  a  result  of  its  withdrawal  from  the  EU,  the  United  Kingdom  lost  access  to  EU 
programmes, including their funding and exchange opportunities. For instance, students from 
the  country’s  higher  education  institutions  are  no  longer  eligible  to  participate  in  the 
exchange scheme under Erasmus+.  

Although the TCA makes it possible for the United Kingdom to participate as an associated 
non-EU  country  in  certain  EU  programmes,  such  participation  requires  the  adoption  of 
bilateral protocols and financial contributions. These protocols were not adopted in 2021. 

Pending  their  adoption,  entities  from  the  United  Kingdom  benefit  from  transitional 
arrangements  allowing  them  to  apply  to  calls  for  proposals  under  Horizon  Europe  and 
undergo the evaluation procedures.  

It is recalled that, under the Horizon Europe Regulation,34 entities from non-associated non-
EU  countries  are  eligible  to  participate  in  Horizon  Europe  projects  without  receiving  EU 
funding.  In  these  cases  third  country  entities  would  need  to  obtain  financial  support  from 
other sources. 

13.  Conclusions 

Despite  the  unprecedented  sweeping  scope  of  the  TCA,  and  its  trade  facilitation  measures, 
the TCA is not, and was never intended to be, a substitute for EU membership.  

32   Decision No 1/2021 of the Specialised Committee established by Article 8(1)(r) of the TCA between the EU 
and the United Kingdom of 28 September 2021, as regards the extension of the period referred to in Article 
540(3) of the TCA during which DNA profiles and dactyloscopic data can be exchanged with the United 
Kingdom.  

33   https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22021D2323 
34   Regulation (EU) 2021/695 of the European Parliament and of the Council of 28 April 2021 establishing 
Horizon Europe – the Framework Programme for Research and Innovation, laying down its rules for 
participation and dissemination, and repealing Regulations (EU) No 1290/2013 and (EU) No 1291/2013 (OJ 
L170/1) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0695&from=EN  

19 

 
 
                                                           
For  trade  in  goods,  the  TCA  does  not  eliminate  customs  procedures  and  controls,  rules  of 
origin in order to benefit from the abolition of tariffs, or the non-tariff barriers resulting from 
regulatory  divergence.  For  services,  the  flexibilities  offered  by  the  TCA  are  not  remotely 
comparable  to  the  ease  with  which  services  can  be  delivered  in  the  EU  single  market.  The 
same holds true for all other EU policy areas which are addressed in the TCA, ranging from 
transport  and  energy  to  fisheries  and  judicial  cooperation  in  criminal  matters.  Despite  the 
TCA,  trade  and  cooperation  between  the  EU  and  the  United  Kingdom  have  become  more 
complex and challenging, as compared to the situation when the United Kingdom was an EU 
member. 

Given that Brexit marks the end of the regulatory alignment between the EU and the United 
Kingdom,  the  on-going  and  future  legislative  developments  are  relevant  for  the  effective 
implementation  of  the  TCA.  Therefore,  continued  monitoring  of  the  United  Kingdom’s 
regulatory reform in the areas covered by the TCA is of vital importance to ensure that it does 
not  conflict  with  the  TCA  provisions  and  that  EU  businesses  are  not  put  at  a  competitive 
disadvantage. 

The EU’s objective is to maintain a stable and positive relationship with the United Kingdom, 
which  remains  a  major  trading  partner.  However,  the  quality  of  the  future  relationship  will 
depend  to  a  large  extent  on  the  degree  of  compliance  by  the  United  Kingdom  with  the 
commitments undertaken in the TCA and the Withdrawal Agreement.  

20