(Bloomberg) -- European Union ambassadors gave the go-ahead to the bloc's draft free-trade agreement with the U.K., paving the way for the deal to take effect on Jan. 1.
“EU ambassadors have unanimously approved the provisional application of the EU-UK Trade and Cooperation Agreement as of January 1, 2021,” Sebastian Fischer, a Brussels-based spokesman for the German government, whose country currently holds the EU's rotating presidency, said in a Twitter post on Monday.
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The thumbs-up by EU member-country envoys sets the stage for formal approval by the 27-nation bloc's governments on Tuesday and for a vote by the U.K. House of Commons on Dec. 30.
The European Parliament plans to give its verdict during the first two months of next year, saying more time is needed for proper scrutiny. Meanwhile, the accord is slated to enter into force provisionally once the U.K.'s post-Brexit transition ends on Thursday.
Tariff-Free Trade
The hard-fought pact reached by EU and U.K. negotiators on Dec. 24 will prevent tariffs from being imposed on two-way goods trade while marking Britain's definitive departure from the European single market and legal framework 48 years after the country joined the bloc.
The deal softens the economic blow to the U.K. of leaving the European single market, even if the country's long-term growth is set to be hit. Britain's growth is forecast to be 0.5 percentage point lower every year for the next decade than it would have been had the country stayed in the bloc.
For the EU, reaching a deal avoids poisoning relations with a key diplomatic and commercial neighbor for years, and provides a basis for further cooperation in future.
Key Dates in the Ratification Process:
| Dec. 29 | EU governments could formally approve the trade accord on Dec. 29 |
| Dec. 30 | U.K. House of Commons votes on the deal |
| February | European Parliament will have to give its consent to the agreement by the end of the month |
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