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

This article explores the dispute settlement elements of the UK-EU Trade and Cooperation Agreement’s novel Level Playing Field 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 is enforced through review by a dedicated Panel of Experts procedure, just as other aspects of the LPF are subjected to the TCA’s general dispute settlement system of state-to-state arbitration which excludes jurisdiction of either the UK or EU courts. The article will argue that the substantive and procedural features of the TCA’s LPF mechanism affords wide opportunity for parties to practice regulatory divergence while evincing a commitment to shared values