Since the United Kingdom’s departure from the EU, policy decisions made by both the UK and the EU will, over time, lead to regulatory divergence and create barriers to trade between the two separate regulatory and legal spaces.

The UK government has already undertaken a comprehensive review of all retained EU law, to reap the benefits of its regulatory autonomy, and specific regulatory reforms have been identified in high-growth sectors. Yet there are some constraints. The UK has committed to respecting certain EU and international standards provided for in the Trade and Cooperation Agreement concluded with the EU. Most notably, a common level of protection is secured in certain areas deemed relevant for the level playing field, such as subsidy control, taxation, labour and social standards and environment and climate, although the strength of the level playing field safeguards differs considerably by area. Moreover, regulatory divergence would come at the expense of single market access.