Standing the Test of Time: The Level Playing Field and Rebalancing Mechanism in the UK–EU Trade and Cooperation Agreement (TCA)

Abstract

This article explores the dispute settlement elements of the UK–European Union Trade and Cooperation Agreement’s (TCA) novel Level Playing Field (LPF) rebalancing obligations, consisting of a requirement not to lower standards in areas of labour, the environment and subsidy policy such that an adverse material impact results to trade or investment flows between the parties. The test for violations of these provisions is narrowly framed, requiring strong evidence of significant harms and carefully calibrated retaliation. The system contemplates several avenues of dispute settlement including unilateral ex ante retaliation which may be levied against another sector. The article suggests that the substantive and procedural features of the TCA’s LPF mechanism affords reasonably wide opportunity for parties to practice regulatory divergence while evincing a commitment to shared values.