EU, U.K. UNVEIL DETAILS OF VAST TRADE PACT

Much remains to be negotiated after accord takes effect

The European Union and the United Kingdom made public Saturday the vast agreement that is likely to govern future trade and cooperation between them from Jan. 1, setting the 27-nation bloc’s relations with its former member country and neighbor on a new but far more distant footing.

EU ambassadors and lawmakers on both sides of the English Channel will now pore over the “EU-UK Trade and Cooperation Agreement,” which contains over 1,240 pages of text. EU envoys are expected to meet on Monday to discuss the document, drawn up over nine intense months of talks.

Businesses, so long left in the dark about what is in store for them, will also be trying to understand its implications.

Most importantly, the deal as it stands ensures that Britain can continue to trade in goods with the world’s biggest trading bloc without tariffs or quotas after the U.K. breaks fully free of the EU.

However, British exporters will face regulatory hurdles that will make it more costly and burdensome to do business in Europe.

Among them, U.K. firms will have to certify the origin of their exports to qualify for tariff-free access to the EU. There will be limits on what proportion of goods can be assembled from parts made overseas to qualify for tarifffree access. And the absence of a mutual recognition agreement means U.K. regulatory bodies won’t be able to certify products for sale in the EU, a potentially big barrier to trade.

But other barriers will be raised, as the U.K. loses the kind of access to a huge market that only membership can guarantee. They range from access to fishing waters to energy markets, and include everyday ties so important to citizens like travel arrangements and education exchanges.

EU member countries are expected to endorse the agreement over the course of next week. British legislators could vote on it on Wednesday. But even if they do approve it, the text would only enter force provisionally on New Year’s Day as the European Parliament must also have its say.

EU lawmakers said last weekend that there simply wasn’t enough time to properly scrutinize the text before the deadline, and they will debate and vote on the document in January and February, if the approval process runs smoothly.

Despite the deal, unanswered questions linger in many areas, including security cooperation — with the U.K. set to lose access to realtime information in some EU law enforcement databases — and access to the EU market for Britain’s huge financial services sector.

The deal also offers little clarity for financial firms. There is no decision on socalled equivalence, which would allow firms to sell their services into the single market from the City of London. The agreement only features standard provisions on financial services, meaning it doesn’t include commitments on market access.

The U.K. and EU will discuss how to move forward on specific equivalence decisions. The European Commission, which is in charge of allowing access to the EU’S market, said it needs more information from the U.K. and it doesn’t plan to adopt any more equivalence decisions at this point.

Disputes on the deal must be negotiated between the EU and the U.K. with no role for the EU courts. An arbitration panel may rule on some areas and can order one side to resolve the problem or offer compensation.

Failure to do so allows the other side to “suspend obligations” which could mean blocking some access or cooperation.