The European Union and United Kingdom have struck a provisional deal that should avert New Year's chaos for cross-border traders and bring back some stability after years of Brexit turmoil.
With just over a week until the UK’s final split from the EU, the UK government said the “deal is done”.
"The deal is fair, balanced and right," European Commission President Ursula von der Leyen said in Brussels after the announcement. "There was so much at stake...it was a deal worth fighting for."
"The deal is done," UK Prime Minister Boris Johnson, as he was due to address the press live at 10 Downing Street.
The post-Brexit trade deal should ensure the two sides can trade in goods without tariffs or quotas. But despite the breakthrough, key aspects of the future relationship between the 27-nation bloc and its former member remain uncertain.
The British and European parliaments both must hold votes on the agreement, though the latter may not happen until after the UK leaves the EU’s economic embrace on Jan. 1.
Months of tense and often testy negotiations gradually whittled differences between the two sides down to three key issues: fair-competition rules, mechanisms for resolving future disputes and fishing rights. The rights of EU boats to trawl in British waters remained the last obstacle before it was resolved.
However, key aspects of the future relationship between the two sides remain unsettled.
Johnson had insisted the U.K. would “prosper mightily” even if no deal were reached and the U.K. and the EU had to reinstate tariffs on each other's goods. But his government acknowledged that a chaotic exit was likely to bring gridlock at Britain’s ports, temporary shortages of some goods and price increases for staple foods. The turmoil could cost hundreds of thousands of jobs.
The EU has long feared that Britain would undercut the bloc’s social, environmental and state aid rules after Brexit and gain a competitive advantage over the EU. Britain denies planning to institute weaker standards but said that having to continue following EU regulations would undermine its sovereignty.
"Independent coastal state"
A compromise was eventually reached on the tricky “level playing field” issues.
The economically minor but hugely symbolic issue of fishing rights came to be the final sticking point, with maritime EU nations seeking to retain access to U.K. waters where they have long fished and Britain insisting it must exercise control as an “independent coastal state."
It has been 4 1/2 years since Britons voted 52%-48% to leave the EU and — in the words of the Brexiteers’ campaign slogan — “take back control” of the U.K.’s borders and laws.
It took more than three years of wrangling before Britain left the bloc’s political structures on Jan. 31. Disentangling the two sides' economies took even longer.
The U.K. has remained part of the single market and customs union during an 11-month post-Brexit transition period. As a result, many people so far have noticed little impact from Brexit.
On Jan. 1, the breakup will start feeling real. Even with a trade deal, goods and people will no longer be able to move freely between the U.K. and its continental neighbors without border restrictions.
EU citizens will no longer be able to live and work in Britain without visas -- though that does not apply to the more than 3 million already doing so -- and Britons can no longer automatically work or retire in EU nations. Exporters and importers face customs declarations, goods checks and other obstacles.