The UK and the EU have reached agreement that the "backstop" guarantee to avoid a hard Irish Border will be included in the draft Brexit treaty and that it will apply unless another solution is found in negotiations.
Here is a guide to the latest Brexit developments:
What has happened today?
The UK and EU negotiators have reached an agreement on a transition period that will apply after Brexit. The UK will leave the EU at the end of March 2019. The transition period will apply a kind of stand-still, particularly in trade, until December 2020. So businesses will be able to trade between the UK and EU much as they can now until the end of 2020. This would avoid the huge disruption which would come if the UK left in March next year, before a new trade deal was agreed between it and the EU. This threatened the sudden imposition of tariffs and customs barriers which could have created chaos.
Irish businesses will be relieved. Some 40 per cent of exports from indigenous industry go to the UK and a large proportion of exports to Continental Europe go via the UK landbridge. This trade should now be able to continue unhindered until the end of December 2020, though what happens beyond that remains uncertain.
So this is all fully agreed now?
No. As the old saying goes, nothing is agreed until everything is agreed. So until all the details of the withdrawal agreement are signed off later this year and some progress is made on how future arrangements will work between the UK and EU, this is a draft. It is an important breakthrough, but there is still a way to go here. The Irish Government will be glad to see the transition deal set out – though they would have preferred a longer transition – and will now want a focus on a new UK/EU trade deal, of vital interest to Ireland. The future trading and political relationships between the UK and the EU will start to be scoped out in the next round of negotiations.
And what about the Irish Border?
The Border featured in Monday’s announcement – and this is far from solved. Last December the UK agreed that if no other way was found to avoid a hard Border on the island of Ireland, the North would continue to remain aligned with the rules and regulations of the EU trading bloc, as set down in the single market and customs unions rules. This was called the “backstop” agreement as it would apply if no other solution was found.
There was a row then with the DUP, who insisted that a separate paragraph was written into the December agreement which said there would be no new trade barriers between the North and Britain. If a different regime applied in the North than in the rest of the UK, such controls would be needed. This surfaced again in February when a draft of the withdrawal agreement was published by the EU, which again referred to the backstop, but made no reference to avoiding trade borders between the North and Britain. Theresa May said no UK prime minister could sign off on this. Complicating matters is the fact that Ms May’s government relies on the support of the DUP’s MPs in the House of Commons.
And now?
Well the backstop remains in the draft withdrawal text, a revised version of which was published on Monday. Both sides have agreed that the backstop must form part of the final legal text, but still have to agree exactly how it would be achieved. UK Brexit Minister David Davis says that the UK hopes to negotiate such a close trade deal with the EU that the backstop will not need to be used. He said both sides agree on the goal of avoiding a hard Border, but operationally how it will be done has still to be sorted out. Irish negotiators will be satisfied that the UK has conceded the inclusion of the backstop as part of the formal agreement, even if final wording is not agreed. However the issue was not pushed to a conclusion ahead of this week’s summit and much work remains to be done here. The protocol published as part of the draft text notes that the UK has committed to avoiding the return of any physical infrastructure or Border checks. And there is a commitment to push forward with talks on the Border issue quickly.
Can this be sorted out?
The same problem which was highlighted since the Brexit vote and was central to last December’s talks remains. If the UK leaves the single market and the customs union, then it is very difficult to avoid checks at the border between the UK and EU. A UK/EU trade deal which agreed that no tariffs – or special import taxes – would apply in future would help. But it would still leave the question of the necessary checks to ensure rules and regulations in areas such as product standards, food safety and, crucially, confirming the origin of products, remains. And here we get back into the same old loop – if different standards and rules are applied in the North to avoid a Border, then checks will be needed on goods moving between the North and Britain.