Implementation of EU-UK Trade Agreement Has Been Challenging, EU Parliament Says

Although implementation of the EU-U.K. Trade and Cooperation Agreement has gone better than expected, a range of issues continue to plague trade between the two sides, including in the agriculture sector, European Parliament members said during a hearing last week. Discussing a draft report on the implementation of the TCA, Parliament Member Sean Kelly of Ireland said “trade flows have been negatively impacted between the EU and the U.K. post-Brexit, which is not a surprise.” But it’s “welcome news” that the TCA “has been smoother in comparison to other agreements between the EU and U.K.”

“While the agreement establishes a relationship that is in no way comparable to the seamless trade that existed while the U.K. was a member state to TCA,” Kelly said, “it does provide a foundation from which we can rebuild the EU-U.K. relationship.”

Kelly said the “zero-tariff arrangements” under the TCA, while “far better than a no-deal Brexit scenario,” still have caused issues for Irish businesses in particular. He said Irish companies have struggled to adapt to the TCAs customs procedures, rules of origin provisions and new supply chains.

Czech MEP Martin Hlavacek, who was reporting on the implementation report’s portions on agriculture, said data shows “quite a significant impact” on agri-food trade. He said companies in the industry have had to “discontinue” or “significantly reduce” their business because the “patterns of trade and the routes of trade have significantly changed.”

“More importantly, going forward, we can expect more regulatory divergence” between the EU and the U.K., Hlavacek said. Irish MEP Frances Fitzgerald said the EU needs to keep a “close eye on further policy positions from the U.K.,” including how it approaches free ports. Britain announced plans to create up to 10 "freeports" post-Brexit, which includes fewer customs checks and duties (see 1908020025 and 2103250025).

Romanian MEP Dan Nica touched on energy trade, which has spiked since Russia’s invasion of Ukraine last year. He said U.K.-EU energy trade “increased considerably” in 2022, adding that U.K. exports of gas increased by more than 300% compared with 2021. He said the EU should look to “renew and strengthen the EU-U.K. cooperation on energy.”