Wales and the UK-EU Trade and Cooperation Agreement: Level Playing Field

Published 07/03/2022   |   Reading Time minutes

The Trade and Cooperation Agreement (TCA) sets up the new UK-EU relationship following the UK’s withdrawal from the EU.

Our new UK-EU series summarises key parts of the agreement and what it means for Wales.

This guide explains the Level Playing Field, or “LPF”, between the UK and EU, which is summarised below.


The UK and EU have new arrangements in place which aim to maintain open and fair competition between them for trade and investment, in a manner conducive to sustainable development. This is known as the ‘level playing field’ (LPF).


Before the end of the Brexit transition period, the UK and EU’s rules were the same. Now that the transition period has ended, their rules for all types of things can differ or stay the same.

‘Divergence’ is the term used to for when rules differ.

‘Alignment’ is the term used for when rules stay the same.

The UK and EU want to ‘level the playing field’ between them for trade and investment. By doing this, they hope to keep competition between them open and fair.


For this new system, the UK and EU have agreed to use a combination of mechanisms. The mechanisms are:

  • Non-regression
  • Divergence and rebalancing measures
  • Rules, including standards for labour and social, environment and climate and subsidies
  • International commitments
  • Dispute resolution

These are key to understanding the TCA’s LPF provisions. Different mechanisms apply to different parts of the LPF, making this part of the TCA complex

Sustainable development

The LPF is supplemented by a commitment to operate in “a manner conducive to sustainable development.” The UK and EU set out their shared understanding of sustainable development to cover:

  • economic development
  • social development
  • environmental protection
What does it mean for Wales?

As the TCA introduces the possibility of future divergence (differences) or alignment (similarities) of standards and rules between the UK and EU, this will also apply to Wales.

In addition to UK-EU divergence and alignment, the four nations of the UK are able to diverge or align from one another in devolved areas previously governed or coordinated by the EU. For example, Wales can have different rules in place to Scotland or England.

Article by Sara Moran, Senedd Research, Welsh Parliament