The Trade and Cooperation Agreement (TCA) between the European Union and the United Kingdom, which was signed on December 24, 2020, has brought some clarity to the future of the EU-UK trade relationship. However, the agreement has also raised some concerns among Italian businesses and stakeholders who are heavily dependent on trade with the UK.
Italy is one of the top five EU member states in terms of its trade volume with the UK. According to the Italian Ministry of Economic Development, in 2019, the trade between Italy and the UK was worth €43 billion. Italian exports to the UK accounted for €16 billion, while imports from the UK amounted to €27 billion. Therefore, the TCA`s implications for Italian businesses cannot be ignored.
One of the significant concerns is the introduction of tariffs and quotas on goods. Under the TCA, there will be no tariffs or quotas on goods that meet the rules of origin criteria. However, goods that do not meet these criteria will be subject to tariffs, which can be as high as 10%. This means that Italian businesses exporting goods to the UK will have to ensure that their products meet the rules of origin criteria to avoid the additional costs.
Another issue is the services sector, which is essential for Italy, especially in the tourism industry. The TCA does not include mutual recognition of professional qualifications, which means that Italian professionals working in the UK will have to comply with UK regulations, which could be different from those in Italy. This could make it difficult for Italian businesses to send their employees to the UK and vice versa, affecting the cross-border provision of services.
The TCA also affects the financial sector. Italian banks operating in the UK will lose their passporting rights, meaning they will have to set up subsidiaries in the UK to continue providing services to their UK clients. Similarly, UK banks operating in Italy will have to comply with Italian regulations to operate in the country.
In conclusion, the TCA between the EU and UK has brought some clarity to the future of their trade relationship. However, Italian businesses must prepare for the changes and challenges that the agreement presents. To mitigate the risks and maximize the opportunities, businesses should seek professional advice and develop strategies to adapt to the new trading environment.