UK Prime Minister Theresa May has broken the deadlock in stifled Brexit talks, with a first-phase agreement to take discussions into the next round of critical trade negotiations.

An agreement over the key issues of UK/EU citizens’ rights, the Irish border and divorce settlement, was struck early this morning (UK local time) following all-night crunch talks in Brussels.

European Commission President Jean-Claude Juncker deemed ‘sufficient progress ‘ has been made on the three areas of negotiation, the prospects of which had looked pretty bleak following the UK Government’s inability to strike a deal on Monday.

In a press conference that followed, European Council President Donald Tusk said a draft agreement has been sent to leaders of the EU 27 and he would be asking them to mandate talks on future trade agreements.

UK/EU CITIZENS’ SECURITY

The deal, enshrined in a ‘joint report’ from UK and EU negotiators, (click here to read the report),  protects the rights of EU citizens living in the UK and those UK citizens in the EU 27 after the split.

“Brexit created great uncertainty for those [EU citizens living in the UK] and their families, today we bring back the certainty,” Juncker said in a press conference.

“The commission’s negotiators have made sure that the choices made by EU citizens living in the UK will be protected, we have made sure that their rights will remain the same after the UK has left the European Union. The same goes for UK citizens living in the EU 27.”

However, the European Court of Justice will still be responsible for EU citizens in the UK, with more detail expected to follow from EU Chief Negotiator Michael Barnier.

There will be no ‘hard border’ between Ireland and Northern Ireland, with the UK ‘maintaining full alignment with those rules of the Internal Market and the Customs Union’ in a move that protects the 1998 ‘Good Friday’ agreement.

Meanwhile, the UK will honour the financial settlement from the divorce bill under commitments taken by the EU 28, but an exact figure has yet to be revealed.

WHAT NEXT?

If the European Council deems that ‘sufficient progress’ has been made, negotiators from both sides will begin drafting a withdrawal agreement based on Article 50 of the Treaty on European Union.

The Commission said it stands ‘ready to begin work immediately on any possible transitional arrangements and to start exploratory discussions on the future relationship between the European Union and the United Kingdom’.

Having met with European Council President Donald Tusk, Theresa May’s next task will be to convince leaders of the 27 other EU member states to back the agreement at a European Council summit meeting next week.

It is worth pointing out that this ‘joint report’ is not the withdrawal agreement, which needs to be drafted by negotiators and then approved by the Council and ratified by the UK Parliament and the European Parliament.

Juncker said: “This is a difficult negotiation but we have now made a first breakthrough. I am satisfied with the fair deal we have reached with the United Kingdom. If the 27 Member States agree with our assessment, the European Commission and our Chief Negotiator Michel Barnier stand ready to begin work on the second phase of the negotiations immediately.

“I will continue to keep the European Parliament very closely involved throughout the process, as the European Parliament will have to ratify the final Withdrawal Agreement.”

Barnier added: “The Commission’s assessment is based on the real, genuine progress made in each of our three priority areas. By agreeing on these issues, and settling the past, we can now move forward and discuss our future relationship on the basis of trust and confidence.”

To view the remarks made by EU Commission President Jean-Claude Juncker, click here. 

DUTY FREE BOOST

Adding his comments directly to TRBusiness on these latest developments today, John Hume, Managing Partner at Hume Brophy said this agreement is both ‘straightforward and positive’, as it creates the basis for an ‘automatic’ return of duty free allowances in the UK on March 30, 2019.

However, he also acknowledged when asked that since the UK will still technically be in the customs union after March 30 for a temporary period – as opposed to any hard Brexit scenario – this does mean that some of the 27 EU member countries could theoretically want to have a say in the duty free issue.

He further maintains that today’s Brexit agreement is also equally very important, because it effectively cements the fact that ‘the exit deal is in place’, while ‘clearing the path’ for ETRC to discuss the issue openly with all parties from now on.

This is in addition to the early engagement ETRC has already had – and  continues to have with key parties in Europe – particularly in Ireland, France and Spain and through its multifaceted campaign in Brussels.

Additional reporting by Doug Newhouse.