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Britain, EU clinch Brexit 'breakthrough' with move to trade talks

By Alastair Macdonald and Gabriela Baczynska

 

Britain's Prime Minister Theresa May is welcomed by European Commission President Jean-Claude Juncker at the EC headquarters in Brussels, Belgium December 8, 2017. REUTERS/Yves Herman

 

BRUSSELS (Reuters) - Britain and the European Union struck a divorce deal on Friday that paves the way for arduous talks on future trade ties, easing immediate pressure on Prime Minister Theresa May and boosting hopes of an orderly Brexit.

 

May rushed to Brussels before dawn to seal a European Commission agreement that "sufficient progress" had been made to begin talks about trade and a two-year Brexit transition period that will start when Britain leaves the EU on March 29, 2019.

 

Negotiators in London, Brussels and Dublin worked through the night before breaking an impasse over the status of the Irish border, the last major obstacle to the opening of trade talks which EU leaders are due to bless at a summit on Dec. 15.

 

But though the Irish prime minister called a British pledge to avoid a destabilising "hard border" for Northern Ireland a "bullet-proof" commitment, one senior EU official conceded that wording to appease May's Belfast allies was a "fudge" which had simply put off until later the need to "square the circle".

 

While Northern Ireland would remain aligned with the rules of the EU's single market and customs union under which member state Ireland operates, May's government is officially committed to leaving both the single market and customs union.

 

Actual negotiations on a trade pact that may take several years to agree may not start for some months. But EU officials said they should be ready to start rapid talks in January to give May the transition period she wants to reassure business that not much will change for a couple of years after Brexit.

 

Speaking before sunrise at the EU executive's headquarters after a hurried flight on a Royal Air Force plane, May said opening up trade talks would bring certainty for citizens and businesses about Britain's future after quitting the EU.

 

"The most difficult challenge is still ahead," European Council President Donald Tusk cautioned. "We all know that breaking up is hard. But breaking up and building a new relationship is much harder."

 

May, looking weary after just a couple of hours sleep, spoke after Commission President Jean-Claude Juncker announced the breakthrough, first in English and then in German and French.

 

The move to agree trade talks 18 months after the United Kingdom's shock vote to exit the EU allayed some fears of a disorderly Brexit that could disrupt trade between the world's biggest trading bloc and its sixth-largest national economy.

 

Sterling was dented when last-minute objections from Belfast forced May to abort a deal on Monday while already in Brussels, but it climbed to a six-month high against the euro <EURGBP=D3> on Friday. It later gave up earlier gains and turned lower on the day against the EU common currency as investors took profits after a sharp rally in recent days.

 

BREXIT DIVORCE?

 

Facing 27 other members of the bloc, May largely conceded to the EU on the structure, timetable and substance of the negotiations.

Moving to talks about trade and a Brexit transition was crucial for May's own future after her premiership was thrown into doubt when she lost the ruling Conservative Party its majority in an unwisely called snap election in June.

 

"I very much welcome the prospect of moving ahead," said May, a 61-year-old Anglican vicar's daughter who herself voted to stay in the EU in the June 2016 referendum but has repeatedly insisted Britain will make a success of Brexit.

 

A senior British banker said the deal signalled May would stay in power for now and that Britain was heading toward a much closer post-Brexit relationship with the EU than many had feared.

 

Irish Prime Minister Leo Varadkar agreed. "...What phase one was always about was narrowing the parameters, and we are now funnelling and directing things into a situation where I believe the United Kingdom including Northern Ireland will remain in alignment with the EU on lots of regulations," he told Irish national broadcaster RTE on Friday evening.

 

Heralding pitfalls ahead, however, Scotland's leader Nicola Sturgeon swiftly cited the promise of free trade on the Irish border as removing an argument used to dissuade Scots from breaking their union with England to rejoin the European Union.

 

Draft guidelines showed the transition period, which would start on March 30, 2019, could last around two years, as May has requested. During that time, Britain will remain part of the EU's customs union and single market but no longer take part in EU institutions or have a vote.

 

It will also still be subject to EU law.

 

Pro-Brexit Conservative lawmakers rallied around her after the deal. This looked like a signal that the party, which has been split over EU membership for generations, was not preparing to ditch her immediately despite the election fiasco in June that left her government dependent on the support of Northern Ireland's Democratic Unionist Party (DUP).

 

British Foreign Secretary Boris Johnson, who spearheaded the 2016 Brexit campaign, congratulated May, adding that Britain would now take back control of its laws, money and borders.

 

Supporters of a radical Brexit were tougher.

 

Brexit campaigner Nigel Farage struck a jarring note saying it was extraordinary a British premier had conceded so much in the middle of the night, agreeing to all the demands of Juncker, Tusk and EU negotiator Michel Barnier.

 

"The British prime minister has to fly through the middle of the night to go and meet three unelected people, who condescendingly say: 'Now, jolly well done May, you've met every single one of our demands, thank you very much, we can now move on to the next stage'."

 

Asked for an example of the EU conceding something to London, which says it will pay 40-45 billion euros over many years to meet EU obligations, Barnier said Brussels dropped a demand that Britain bear relocation costs for two EU agencies that are leaving London - costs in the hundreds of millions.

 

Juncker once put the Brexit bill at some 60 billion euros ($70 billion) but Barnier said it was not possible to calculate a firm figure as much depended on future developments.

 

Jeremy Corbyn, the socialist leader of Britain's main opposition Labour party, said on Friday he wanted to see much more information about the divorce deal before he could judge whether it was a breakthrough.

 

Corbyn said Labour had consistently called for maintaining the benefits of belonging to the EU's customs union and single market during a transitional period as Britain leaves the bloc.

 

"The transitional period is unspecific and I think she needs to bring some clarity to that," he said on a visit to Geneva.

 

"BREAKTHROUGH"

 

The EU had insisted it would only move on to trade talks if there was enough progress on three key issues: the money Britain must pay to the EU; rights for EU citizens in Britain and British citizens in the EU; and how to avoid a hard border with Ireland.

 

"I believe we have now made the breakthrough we needed," Juncker said.

 

On citizens rights, London and Brussels agreed to offer equal treatment on social security, healthcare, employment and education and that Britain will enable its judges to ask the European Court of Justice to weigh in when necessary for eight years after Brexit, aiming to create a common body of law.

 

But the crucial breakthrough was on the future of the 310-mile (500-km) UK-EU land border on the island of Ireland. The Northern Irish DUP had vetoed a draft deal on Monday.

 

May stayed up most of the night into Friday, grabbing just a couple of hours sleep, as she worked the phones from Downing Street to secure agreement from Dublin, Brussels and the DUP.

 

They agreed to avoid a hard border which might upset the peace established after decades of Protestant-Catholic violence, but said the details would be agreed as part of talks about the future relationship, according to a 15-page negotiators report.

 

Britain agreed that should London and Brussels fail to agree a final Brexit deal, the United Kingdom will maintain "full alignment" with those rules of the internal market and customs union that help protect north-south cooperation in Ireland.

 

"In all circumstances, the United Kingdom will continue to ensure the same unfettered access for Northern Ireland's businesses to the whole of the United Kingdom internal market," it said.

 

The DUP gave only a conditional endorsement of the new terms: "We cautioned the prime minister about proceeding with this agreement in its present form given the issues which still need to be resolved," its leader Arlene Foster said.

 

"Nothing is agreed until everything is agreed and how we vote on the final deal will depend on its contents."

 

It remains unclear how Britain can fully meet all three key pledges it has made on the border: keeping Northern Irish rules in line with the EU, keeping Northern Ireland aligned with the UK mainland and allowing the UK to diverge from EU regulations.

 

"It's still a fudge," said one senior EU official. "They put off squaring the circle till later. But how can they do it?"

 

For Brussels and Dublin, however, the key commitment was the first. "The rest is Theresa May's problem," the official said.

 

 

-- © Copyright Reuters 2017-12-09

[natway09]

Without a hard border the whole customs /immigration thing will not work. My earlier words still ring true Britain is in for a very tough 10 years

[nabbie]

EU agrees because they did not want May to resign this month... yet EU still wants to delay next trade stage in Feb. So the deal does not make sense at all.

[Thongkorn]

You mean MAY sold out Brexiteers,

[7by7]

17 minutes ago, Thongkorn said:

You mean MAY sold out Brexiteers,

How so?

 

37 minutes ago, nabbie said:

EU agrees because they did not want May to resign this month... yet EU still wants to delay next trade stage in Feb. So the deal does not make sense at all

For those who are interested in what has actually been agreed so far, here is the Joint report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union published yesterday.

Edited December 9, 2017 by 7by7

[Thongkorn]

Mays heart was never in Britain leaving the EU, Niger Farage would have been the man to be in charge , he speaks a lot of truth, But he is not PC .

[7by7]

11 minutes ago, 7by7 said:

29 minutes ago, Thongkorn said:

You mean MAY sold out Brexiteers,

How so?

 

4 minutes ago, Thongkorn said:

Mays heart was never in Britain leaving the EU, Niger Farage would have been the man to be in charge , he speaks a lot of truth, But he is not PC .

 

How about answering the question?

 

BTW, the reason why Farage is not in charge of the negotiations is because he is not part of the government. 

 

Neither is he interested in so being; all he's interested in now is his huge 'redundancy' payment from the European Parliament and his huge pension from same; which he will get despite his poor attendance record!

[Thongkorn]

 No matter what is say You will

2 minutes ago, 7by7 said:

 

 

How about answering the question?

 

BTW, the reason why Farage is not in charge of the negotiations is because he is not part of the government. 

 

Neither is he interested in so being; all he's interested in now is his huge 'redundancy' payment from the European Parliament and his huge pension from same; which he will get despite his poor attendance record!

 No matter what i say  you will always be right , 

[7by7]

2 minutes ago, Thongkorn said:

 No matter what i say  you will always be right , 

Try me, actually answer the question: how has May sold out the Brexiteers with this phase 1 agreement?

 

[RuamRudy]

Introducing the hardline according to Arron Banks

[nontabury]

11 minutes ago, 7by7 said:

Try me, actually answer the question: how has May sold out the Brexiteers with this phase 1 agreement?

 

O.k let Nigel and Rees Mogg explain to you. Although I’m sure you’ll disagree with them. 

 

 

 

[RuamRudy]

So does this mean that the EU Anti-Tax Avoidance  Directive will be enforced in the UK? 

[nontabury]

19 minutes ago, RuamRudy said:

Introducing the hardline according to Arron Banks

Well this is a first Ruam Ruby, for once I completely agree with your post.

Although to be fair, she was never keen to restore sovereign to the British people.

 

[stevenl]

57 minutes ago, Thongkorn said:

Mays heart was never in Britain leaving the EU, Niger Farage would have been the man to be in charge , he speaks a lot of truth, But he is not PC .

With nothing to give negotiations are difficult.

[RuamRudy]

25 minutes ago, nontabury said:

Well this is a first Ruam Ruby, for once I completely agree with your post.

Although to be fair, she was never keen to restore sovereign to the British people.

 

Oh, I am not taking a position here - more a fascinated, if somewhat concerned, observer. 

[vogie]

6 minutes ago, RuamRudy said:

Oh, I am not taking a position here - more a fascinated, if somewhat concerned, observer. 

No your tone is definately more subdued, I can just see you walking around with a blue rosette in your jacket lapel shouting long live the Union. ?

[7by7]

42 minutes ago, nontabury said:

O.k let Nigel and Rees Mogg explain to you. Although I’m sure you’ll disagree with them. 

 

 

 

As that LBC interview was broadcast on the 6th December, I fail to see how it explains how May sold out the Brexiteers with this agreement which was reached on 8th December!

 

Are you saying that they both had advance knowledge of the terms of it?

[nontabury]

1 minute ago, 7by7 said:

As that LBC interview was broadcast on the 6th December, I fail to see how it explains how May sold out the Brexiteers with this agreement which was reached on 8th December!

 

Are you saying that they both had advance knowledge of the terms of it?

Well it would seem so, as both of them have been shown to be correct in there assessment.

 

[Thongkorn]

1 minute ago, nontabury said:

Well it would seem so, as both of them have been shown to be correct in there assessment.

 

 Most things Farage has said , Like the man or not most are near the mark. regardless of what you think about the man,

[7by7]

Just now, nontabury said:

Well it would seem so, as both of them have been shown to be correct in there assessment.

 

Not at all; close on some, totally wrong on others; though, as to be expected, Rees Mogg shows more nous than Farage.

 

I suggest you read the agreement, see link posted earlier.

[Grouse]

9 minutes ago, Thongkorn said:

 Most things Farage has said , Like the man or not most are near the mark. regardless of what you think about the man,

He's an arse. Near the mark indeed. The man makes me want to vomit.

[Thongkorn]

9 minutes ago, Grouse said:

He's an arse. Near the mark indeed. The man makes me want to vomit.

your choice but the People who won the Election do not,

[Grouse]

3 minutes ago, Thongkorn said:

your choice but the People who won the Election do not,

Then they are <deleted> too.

[7by7]

41 minutes ago, Thongkorn said:

your choice but the People who won the Election do not,

Who, in your opinion, are the people who won the election?

 

As UKIP won a grand total of zero seats, it certainly wasn't them!

[nontabury]

2 hours ago, 7by7 said:

Who, in your opinion, are the people who won the election?

 

As UKIP won a grand total of zero seats, it certainly wasn't them!

Stop playing with words,you know fine well that the people voted for Brexit in the referendum,plus at this years G.E. 85% of the electorate voted for parties that support Brexit.

Regarding UKIP, perhaps there’s something amiss with the U.K. electoral system.

You asked a question in your post No 9, so now you’ve received one answer. Perhaps now is the time that you recognise that T.M has truely shafxed the British people. Or are you happy to live in a colony of the E.U.

 

[joecoolfrog]

14 hours ago, Thongkorn said:

Mays heart was never in Britain leaving the EU, Niger Farage would have been the man to be in charge , he speaks a lot of truth, But he is not PC .

He did a runner immediately after the referendum because he knew full well that his wild promises could never be fulfilled. Its easy to promise the moon , a lot harder to actually deliver it.

Edited December 10, 2017 by joecoolfrog

[stevenl]

14 hours ago, Thongkorn said:

your choice but the People who won the Election do not,

Looks to me like there are only losers to that 'election'.

[ilostmypassword]

16 hours ago, Thongkorn said:

 Most things Farage has said , Like the man or not most are near the mark. regardless of what you think about the man,

Like when he said if the vote as 52 t0 48 percent against brexit, he would try again?

[Grouse]

Best fudge I ever tasted!

 

Tell the deltas and epsilons we are leaving the EU in 2019

 

In fact the new deal will be the same as the old deal which the alphas and betas want

 

(the gammas are on the fence so are happy in any circumstance)

 

And, EVERYONE gets to blame the DUP!

 

Double Grouse all round! Cheers!

[nauseus]

2 hours ago, Grouse said:

Best fudge I ever tasted!

 

Tell the deltas and epsilons we are leaving the EU in 2019

 

In fact the new deal will be the same as the old deal which the alphas and betas want

 

(the gammas are on the fence so are happy in any circumstance)

 

And, EVERYONE gets to blame the DUP!

 

Double Grouse all round! Cheers!

Busy with Christmas shopping and the annual servicing and tuning of the ray gun! Not unhappy but I don't like fudges. Cheers.