The announcement that the UK and EU have (at long last) reached agreement on the trade aspects of their future relationship is obviously very welcome news for business. In particular, it avoids the prospect of an acrimonious break with the UK's biggest trading partners and will mitigate some (but by no means all) of the adverse trade impacts of the UK leaving the EU Single Market and Customs Union. However, businesses should be under no illusions about the magnitude of these changes and should still expect some disruption in 2021, particularly in sectors reliant on goods trade with the EU.
Whilst the UK appears to be confident that it can ratify the deal in a matter of days before the end of the year, ratification on the EU side is more problematic because the European Parliament is (not unreasonably, given the length of the text) insisting on more time to scrutinise the agreement. In view of this, it is understood that the EU plans to apply the deal on a provisional basis, as was done in relation to the EU-Canada free trade agreement, pending ratification. Provisional application is possible based on a decision of the EU Council (i.e. the Member States), without the European Parliament's involvement.
Whilst the deal should soften some impacts of the end of the transition period, there are some areas – such as the introduction of new border red tape on UK-EU goods trade – where it will make very little difference. It certainly does not remove the need to prepare for a substantially changed trading environment in 2021. Businesses reliant on goods trade in particular should expect disruption, as explained here; this may well be exacerbated by existing problems at key ports caused by COVID-19.
Our Brexit Readiness Portal sets out what businesses need to do to prepare. Once more details of the deal are known, we will be updating our guidance accordingly. However, the materials on the Brexit Readiness Portal already discuss the likely position should a deal be agreed, based on the draft texts published by the UK and EU earlier in the year – and as noted above, there are some areas where a deal makes little difference to what you need to do to prepare.