The agreement provides for a transitional period that will last until at least 31 December 2020. During this period, the UK will remain in the EU customs union and internal market, and most of the EU legislation will continue to apply to the UK, but the UK will lose the opportunity to participate in EU legislation and the benefits of free trade agreements with third countries. In order for the UK to continue to benefit from these free trade agreements during the transition period, it will need the agreement of the EU and all third countries. In practice, trade in goods and services between the EU and the UK will therefore remain broadly unchanged during the transitional period. The Northern Ireland Protocol, known as the Irish Backstop, was an annex to the November 2018 draft agreement outlining provisions to avoid a hard border in Ireland after the UK`s withdrawal from the European Union. The protocol provided for a provision of the safety net to deal with the circumstances in which satisfactory alternative arrangements were to come into force at the end of the transition period. This project has been replaced by a new protocol that will be described as follows. If an agreement on Northern Ireland is not reached before the end of the transitional period and the controversial Northern Ireland Protocol is implemented, the UK will probably be even more limited if it is able to make changes. Under the protocol, Northern Ireland would be aligned with a limited set of internal market rules to avoid a hard border with the Republic of Ireland, but would leave the EU Union with the rest of the UK.

The protocol will continue as long as it has the democratic support of the Northern Ireland Assembly, which will be invited to vote on the continuation of the protocol at the end of the transition period and then every four years. In the revised policy statement, the EU and the UK agree that they will meet the high common standards in force at the end of the transition period in certain areas including labour and social protection, basic workplace rights, health and safety, fair working conditions and employment standards. , information and consultation rights at the corporate level and restructuring. The protocol also stipulates that EU anti-discrimination directives must continue to be respected. The political statement refers to the autonomy of regulation and decision-making of each bloc and its ability to make equivalency decisions in its own interest. From a British point of view, the latter reference to autonomy is less welcome when it comes to achieving considerable market access in equivalence. If one does not read about the objective of going beyond WTO obligations, there is no explicit reference to an extension of equivalence beyond the existing patch work. In this context, Steven Maijoor, President of the European Financial Markets Authority (ESMA), has already called for a comprehensive and harmonised European regime for trading platforms in third countries. The policy statement also refers to the fact that both parties begin to assess equivalence to each other as soon as possible after the withdrawal, so that they can be completed before the end of the second quarter of 2020.

In order to allay the UNITED Kingdom`s concerns about the sudden withdrawal of equivalence, the documents promise “transparency and appropriate consultation in the process of accepting, suspending and withdrawing equivalency decisions.” We can also expect “close and structured cooperation” in regulation and oversight, as well as information exchange and consultation on regulatory initiatives of common interest, both at the political and technical level.