At the eleventh hour the EU and the UK signed a trade deal that came into effect on 1 January 2021.
We all breathed a sigh of relief that we had avoided the ‘no-deal’ and the consequential tariffs and quotas.
So now we can forget about Brexit and move on. Or can we?
So, all in agreement?
Companies that trade goods between Denmark and the UK will be pleased to avoid the tariffs that could have had a noticeable adverse effect on their margins. But for many companies there is plenty of work ahead.
We all now need to understand how the 1,246-page Trade and Cooperation Agreement (TCA) will affect our businesses. As an example, there are over 80 pages covering ‘Rules of Origin’, which determine whether goods are eligible for preferential tariffs (tariff free). It is complicated and mistakes can be very costly.
There will be new customs checks, there will be new terminology and there will be additional paperwork. And there will certainly be teething troubles as new processes are implemented.
We should not expect Brexit to disappear from our radar. The deal is primarily focused on goods, not services. The Banking Industry, a major industry for the UK, is not included and discussions about regulatory equivalence go on.
More relevant to many businesses, the UK’s data protection laws have not yet been deemed ‘adequate’ by the EU, but the TCA includes a buffer of up to six months during which data transfers can be made under existing EU rules.
If adequacy is not granted in this period, transfers of data between the EU and UK will have to follow the more complicated rules applying to third countries.
There are many provisions in the TCA for review, redress, and arbitration. These can be both positive and negative. Flexibility and uncertainty go hand in hand.
Happily, there is a deal in place, and we need to move on and make it work.
But as I have already said, it is complicated; make sure you get the right advice from your lawyers, trade bodies and chambers of commerce so that we can continue to develop business between the UK and Denmark.