Since 1 January 2021 the United Kingdom and the European Union have traded under the Trade and Cooperation Agreement (TCA). It is an ambitious free trade agreement, the first in EU history to remove all tariffs and quotas on all goods, but it remains an agreement between two separate markets. The difference from before is huge: where there was a single market without internal borders there are now customs, certificates and checks.
No tariffs, but plenty of paperwork
Tariff-free trade applies only to goods that meet the rules of origin, meaning they are produced to a sufficient extent in the UK or the EU. A product assembled in Britain with too many Chinese components, for example, pays duty when it enters the EU. Every consignment needs a customs declaration, and food, plants and animals require health certificates signed by a vet. For a large company these costs are manageable; for a small business shipping a few cases of cheese or wine they can make exporting uneconomic.
When the new rules arrived
The EU applied checks on British goods from day one, 1 January 2021. The UK, to avoid clogging its ports and pushing up prices, postponed its own checks several times: full customs declarations came in 2022, health certificates for EU products of animal and plant origin from 31 January 2024, and physical border checks from 30 April 2024. For travellers, since 12 April 2025 it has been forbidden to bring meat and dairy products from the EU into the UK in personal luggage, because of the risk of foot-and-mouth disease.
Who lost most
According to the Centre for European Reform's June 2026 study, British goods exports to the EU are about 16% below the level they would have reached without Brexit, and goods imports from the EU about 14% below. Services have also declined, less for exports (about 7%) and more sharply for imports (about 19%). The hardest-hit sectors are agri-food, fishing, clothing and small craft production. Trade with the rest of the world has not made up for the losses: exchanges with non-European countries have stayed broadly unchanged.
Italy and the British market
For Italian businesses the UK remains a leading market, especially for wine (starting with prosecco, of which Britons are among the world's biggest drinkers), cheese, pasta, olive oil, fashion, machinery and furniture. After Brexit many exporters turned to British importers and forwarders to handle the paperwork, while direct online sales to consumers became more complicated: for purchases over £135 the recipient may have to pay VAT and duties on delivery, and returns cost more.
Fishing, energy and carbon
Fishing, symbolically central to the 2016 campaign, has remained one of the most sensitive issues: the 2020 deal provided for a gradual reduction in EU quotas in British waters, and the 2025 summit extended EU boats' access until 2038 in exchange for a commitment to reduce veterinary checks. Another chapter concerns carbon: since 2026 the EU has applied a border tax on emissions-intensive imports such as steel and cement. Linking the two emissions markets would spare British firms from paying it.
The veterinary agreement
The most important piece of the reset is the sanitary and phytosanitary (SPS) agreement. In return for dynamic alignment with EU rules on food safety and animal and plant health, the UK would see most certificates and checks on food, plants and animals removed. For businesses it would be the most significant simplification since 2021; for critics, a return to Brussels rules without a vote. The aim is to close the negotiation by the November 2026 summit. See also the effects on the economy and the Brexit special.