As Brexit Saga ‘Poised to End’, What Has Britain ‘Wrangled’ From UK-EU Deal?

The UK is believed to be poised on the brink of a historic Brexit deal with the EU as Prime Minister Boris Johnson is to address his nation on Thursday morning after the two sides pulled an all-nighter hammering out a solution to an agreement that has been mired in sticking points.

UK Prime Minister is expected to confirm on Christmas Eve a historic post-Brexit deal set to define the future trading relationship between Britain and the European Union, reported the Financial Times.

Officials of both sides held a flurry of talks on Wednesday in Brussels in a last-ditch effort to avert the risk of the UK crashing chaotically out of the European single market on 1 January, after the transition period deadline.

An anticipated legal text would preserve tariff-free trade in goods between the UK and the EU, while providing for co-operation in other areas, such as security, thus wrapping up a tumultuous nine months of tense negotiations that followed the 2016 Brexit vote.

Frenzied last-minute work reportedly centered on fine-tuning the details of agreements reached earlier on Wednesday pertaining to the sticking point of EU access to Britain’s fishing waters, according to sources quoted by the outlet. Nevertheless, officials on both sides were said to have confirmed that the terms of the post-Brexit relationship were essentially resolved.

European Commission chief spokesperson Eric Mamer posted a cryptic message on Twitter on Thursday morning to say that “Brexit work” would continue all night.

Much-needed impetus to the stalled talks, headed by chief EU negotiator Michel Barnier and his British counterpart Lord Frost, was given earlier in the week after President of the European Commission Ursula von der Leyen and Boris Johnson waded into the negotiating fray, with fishing access the last major stumbling block.

The post-Brexit deal will provide a legal platform to ‘rebuild’ relations between the sides, ensuring tariff-free trade, and extending to such issues as police and security co-operation, and the cross-border energy market.

Here are some key areas that the sides will purportedly be signing up to.

Fishing

EU fishing rights in UK waters, currently worth about €650mln ($793mln) annually, were one of the intractable aspects of the negotiations. Brussels had demanded unrestricted access to Britain’s waters for a decade, while the UK had offered a three-year transition period.

The inked deal maps out a transition period of five-and-a-half years, granting EU trawlers guaranteed access to UK fishing waters. These rights will be reduced by 25 per cent compared to the current quotas, resulting in boosting Britain’s share of the catch in its own waters from around a half today to about two-thirds during the transition.

Sometime close to the tenth anniversary of the June 2016 Brexit vote, in 2026 – depending on the outcome of regular negotiations, access to waters after the transition period expires.

‘Level Playing Field’

Another crux sticking point throughout the post-Brexit negotiations was the EU’s demand for a so-called ‘level playing field’. This pertains to guarantees of fair competition for its companies, as there were concerns in Brussels that the UK could take advantage of leaving the bloc by lowering standards to render its own firms more competitive.

The draft deal between the sides reportedly includes a new arbitration mechanism aimed at ensuring this “level playing field”, with provision that tariffs could be wielded as a sanctions tool if either side were perceived as seriously undercutting the other’s regulations in areas such as environmental protection.

Dubbed the “freedom clause” by Downing Street, this mechanism, according to Boris Johnson, will offer a legal framework to diverge, while Brussels can look upon it as a safeguard for its market from unfair competition.

Oversight

A related issue in the talks has been the role of the European Court of Justice (ECJ), as British sources indicated that it would not have a say in the resolution of any disputes between the sides – something long argued for by the UK.

Brussels reportedly conceded that it could not have the unilateral right to impose penalties on the UK, while initially hoping to be granted a right to “punish” Britain by imposing tariffs or taxes for “breaking rules” in one or another area.

Tariffs

The UK and the EU appear to have hammered out a zero-tariff and zero-quota regime, in what is perceived as a triumph for Johnson. The prospect of No Deal, which would have seen the UK forced to trade with Brussels on World Trade Organization terms, had triggered fears of a tremendous surge in extra costs for businesses, which would have transferred into swelling prices on many staple food items.

Trade with the EU accounts for 43 per cent of the UK’s exports and 51 per cent of its imports.

A last-moment issue, of key importance to Toyota and Nissan, dealt with trade rules for electric cars, as the UK reportedly claimed it had won concessions to allow electric cars to be traded tariff-free despite a relatively high proportion of their components arriving from outside the EU and UK.

Policing and Security

Some level of agreement on the key issue of security co-operation has also been reached, claim sources cited by the FT.

The UK sought to maintain the same access to shared security databases as it is currently granted, with Brussels insisting this was not an option for non-members. However, the UK is suggested as having secured greater access than it would have faced under a No Deal Brexit.

Ticking Clock

As Britain’s transition period ends on 1 January, there will now be potentially a flurry of activity to get the agreement approved in time.

UK MPs have been alerted to the possibility of an emergency session of the Commons on 30 December, writes the outlet, while the European Parliament has already said that it will not vote before the end of the year. Brussels may, however, provisionally apply the deal until MEPs cast a vote on it in 2021.