The deal is done. The UK and EU have agreed the terms of a new Withdrawal Agreement paving the way for Brexit. Although politics may yet block it, the deal could transform the economic arrangements of Northern Ireland.
Image: Getty Images/AFP/P. Faith
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And so, to paraphrase Winston Churchill, that great hero of Boris Johnson's, is this really the end or maybe still just the end of the beginning?
Around midday on Thursday, news broke that white smoke had wafted from the negotiating HQ in Brussels. EU and UK negotiators have, apparently against all odds, agreed a new Brexit deal.
Whether or not this new deal is ratified by the British Parliament remains anyone's guess, but what is clear is that consensus has been reached by the UK and EU sides on the issue that has dominated the recent flurry of negotiations — Northern Ireland and the question of the British border on the island of Ireland.
So what's new economically speaking?
It is critical to point out at this juncture that everything which follows only applies if the UK and the EU fail to strike a trade agreement which preserves current arrangements in Ireland before the end of the transition period, which will begin immediately after Brexit. The new deal says that the transition period could last up until the end of 2022, if both sides agree.
The Irish elements of the Withdrawal Agreement will only apply if the EU and UK fail to agree a future trading relationshipImage: Reuters/C. Kilcoyne
The matter which proved most vexatious in the Brexit negotiating process since March 2017 had been the so-called "Irish backstop," a mechanism placed in the original Withdrawal Agreement, negotiated by Theresa May's government to avoid the re-imposition of a "hard" border in Ireland in the event that the UK and EU fail to agree a deal which preserves the current situation before the end of the aforementioned transition period.
The new deal can be seen as a return to a "Northern Ireland only backstop" in that its provisions for keeping the six counties of that region aligned with EU rules apply to that region alone and not the island of Britain as well, as the previous deal, rejected several times in the UK Parliament, did.
The new agreement proposes that once Brexit happens on October 31, Northern Ireland will apply the EU's customs and tariffs rules. They will be overseen by the European Court of Justice. That means there would be no need for any customs checks for goods crossing the border between Northern Ireland and Ireland. Any customs checks that would be needed for EU-UK goods would happen in Britain.
However, although Northern Ireland would de facto remain within the EU's Customs Union, it would de jure remain within the UK's customs realm, meaning the region would still benefit from any post-Brexit trade agreements the UK strikes with other countries.
The lack of need for customs checks in Ireland will be complemented by the fact that Northern Ireland will also remain in the EU's Single Market for agrifoods and manufactured goods, meaning no regulatory checks will be necessary on animals or goods crossing the winding, mazy 499-kilometer (310-mile) frontier.
The DUP (pictured) are unlikely to go along with anything that is favorable to the Irish government and vice versa.Image: picture-alliance/empics/A. Chown
A border in the Irish Sea?
Northern Irish unionism is a political ideology which prizes union between Northern Ireland and Britain above all else. The Democratic Unionist Party, the most hard-line major unionist party currently operating in Northern Ireland, has propped up the Conservative government since the last election and its votes are important to the passage of bills.
But does the new deal mean a border in the Irish Sea?
The short answer is yes. As Britain will be out of both the Customs Union and Single Market after Brexit, regulatory and customs checks and controls will be needed for goods going from Britain to Northern Ireland. However, it is hoped that the extent of the checks will be reduced thanks to a series of tariffs exemptions.
Personal goods will be exempt, while goods that are seen to pose no risk of crossing into Ireland from Northern Ireland will also potentially be exempt. This category will be decided on in the future jointly by EU and UK officials in the so-called Joint Committee, a group established to manage the new arrangements.
The EU will ultimately have a veto over which kind of goods are exempted from checks in the Irish Sea, though.
Depending on the terms of the future EU-UK relationship, Northern Ireland could become a special economic zone of sortsImage: Getty Images/AFP/P. Faith
While the price for such an arrangement appears to be the limited checks that will be needed on goods passing from Britain to Northern Ireland, the potential benefits of what would effectively be dual membership of two distinct economic unions could offer the six counties of Northern Ireland the status of a special economic zone.
What about VAT?
In recent days, UK-EU negotiations over Northern Ireland came down to customs, the question of consent within Northern Ireland and also the tricky subject of VAT.
This is probably the part of the new agreement which is least clear, and was the final piece to be agreed.
The revised Withdrawal Agreement, published earlier on Thursday, says that EU law will apply to VAT in Northern Ireland, although it also leaves a provision for the UK to apply VAT exemptions and reduced rates.
Explained: The Irish backstop
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Again, much leeway is given to the Joint Committee on the question of VAT. It states "the Joint Committee may review the application of this Article, taking into account Northern Ireland's integral place in the United Kingdom's internal market, and may adopt appropriate measures as necessary."
If this new deal is agreed, and if no UK-EU deal is struck before the end of the transition period, then the island of Britain will be outside of the EU Customs Union and Single Market and WTO rules will apply thereafter.
What happens if this new deal is agreed by British and EU lawmakers?
Effectively nothing will happen in the short term in terms of changes to trading arrangements. If the deal is agreed and Brexit happens, the transition period will begin and could last until December 2022.
During that time, the UK and the EU will negotiate their future trading relationship. During that time, the status quo will continue to apply. The provisions of the agreement will only apply if no trade agreement is struck which preserves the status quo on the island of Ireland.
Brexit timeline: Charting Britain's turbulent exodus from Europe
Britain shocked the world when it voted to leave the European Union on June 24, 2016. DW traces the major events that have defined Brexit so far.
Image: picture-alliance/empics/Y. Mok
June 2016: 'The will of the British people'
After a shrill referendum campaign, nearly 52% of British voters opted to leave the EU on June 23. Polls had shown a close race before the vote with a slight lead for those favoring remaining in the EU. Conservative British Prime Minister David Cameron, who had campaigned for Britain to stay, acknowledged the "will of the British people" and resigned the following morning.
Image: picture-alliance/dpa/A. Rain
July 2016: 'Brexit means Brexit'
Former Home Secretary Theresa May replaced David Cameron as prime minister on July 11 and promised the country that "Brexit means Brexit." May had quietly supported the Remain campaign before the referendum. She did not initially say when her government would trigger Article 50 of the EU treaty to start the two-year talks leading to Britain's formal exit.
Image: Reuters/D. Lipinski
March 2017: 'We already miss you'
May eventually signed a diplomatic letter over six months later on March 29, 2017 to trigger Article 50. Hours later, Britain's ambassador to the EU, Tim Barrow, handed the note to European Council President Donald Tusk. Britain's exit was officially set for March 29, 2019. Tusk ended his brief statement on the decision with: "We already miss you. Thank you and goodbye."
Image: picture alliance / Photoshot
June 2017: And they're off!
British Brexit Secretary David Davis and the EU's chief negotiator, Michel Barnier, kicked off talks in Brussels on June 19. The first round ended with Britain reluctantly agreeing to follow the EU's timeline for the rest of the negotiations. The timeline split talks into two phases. The first would settle the terms of Britain's exit, and the second the terms of the EU-UK relationship post-Brexit.
Image: picture alliance/ZUMAPRESS.com/W. Daboski
July-October 2017: Money, rights and Ireland
The second round of talks in mid-July began with an unflattering photo of a seemingly unprepared British team. It and subsequent rounds ended with little progress on three phase one issues: How much Britain still needed to pay into the EU budget after it leaves, the post-Brexit rights of EU and British citizens and whether Britain could keep an open border between Ireland and Northern Ireland.
Image: Getty Images/T.Charlier
December 2017: Go-ahead for phase 2
Leaders of the remaining 27 EU members formally agreed that "sufficient progress" had been made to move on to phase two issues: the post-Brexit transition period and the future UK-EU trading relationship. While Prime Minister Theresa May expressed her delight at the decision, European Council President Tusk ominously warned that the second stage of talks would be "dramatically difficult."
Image: picture-alliance/AP Photo/dpa/O. Matthys
July 2018: Johnson, Davis resign
British ministers appeared to back a Brexit plan at May's Chequers residence on July 6. The proposal would have kept Britain in a "combined customs territory" with the EU and signed up to a "common rulebook" on all goods. That went too far for British Foreign Minister Boris Johnson and Brexit Secretary David Davis, who resigned a few days later. May replaced them with Jeremy Hunt and Dominic Raab.
Image: picture-alliance/empics/G. Fuller
September 2018: No cherries for Britain
May's Chequers proposal did not go down well with EU leaders, who told her at a summit in Salzburg in late September that it was unacceptable. EU Council President Tusk trolled May on Instagram, captioning a picture of himself and May looking at cakes with the line: "A piece of cake perhaps? Sorry, no cherries." The gag echoed previous EU accusations of British cherry-picking.
Image: Reuters/P. Nicholls
November 2018: Breakthrough in Brussels
EU leaders endorsed a 585-page draft divorce deal and political declaration on post-Brexit ties in late November. The draft had been widely condemned by pro- and anti-Brexit lawmakers in the British Parliament only weeks earlier. Brexit Secretary Dominic Raab resigned along with several other ministers, and dozens of Conservative Party members tried to trigger a no-confidence vote in May.
Image: Getty Images/AFP/E. Dunand
December 2018: May survives rebellion
In the face of unrelenting opposition, May postponed a parliamentary vote on the deal on December 10. The next day, she met with German Chancellor Angela Merkel to seek reassurances that would, she hoped, be enough to convince skeptical lawmakers to back the deal. But while she was away, hard-line Conservative lawmakers triggered a no-confidence vote. May won the vote a day later.
Image: Getty Images/S. Gallup
January 2019: Agreement voted down
The UK Parliament voted 432 to 202 against May's Brexit deal on January 16. In response to the result, European Council President Donald Tusk suggested the only solution was for the UK to stay in the EU. Meanwhile, Britain's Labour Party called for a no-confidence vote in the prime minister, her second leadership challenge in as many months.
Image: Reuters
March 2019: Second defeat for May's deal
May tried to get legal changes to the deal's so-called Irish backstop in the weeks that followed. She eventually got assurances that the UK could suspend the backstop under certain circumstances. But on March 12, Parliament voted against the revised Brexit deal by 391 to 242. EU leaders warned the vote increased the likelihood of a no-deal Brexit. Two days later, MPs voted to delay Brexit.
Image: picture alliance/AP Photo/T. Ireland
March 2019: Extension after second defeat
Following the second defeat of May's divorce deal, the European Council met in Brussels on March 21 to decide what to do next. EU leaders gave May two options: delay Brexit until May 22 if MPs vote for the withdrawal deal or delay it until April 12 if they vote against the deal. If the deal were to fail again in Parliament, May could ask for a long extension.
Image: picture-alliance/AP Photo/F. Augstein
March 2019: Brexit deal rejected a third time
On March 29, the day that the UK was supposed to leave the EU, British lawmakers voted for a third time against May's deal — rejecting it this time with a vote of 344 to 286. Following the latest defeat, May approached the main opposition Labour leader Jeremy Corbyn in an attempt to find a compromise, angering hardline Brexiteers in her own Conservative party.
Image: picture-alliance/AP Photo/House of Commons/M. Duffy
April 2019: Brexit delayed until Halloween
With the April 12 deadline looming after the third defeat of May's deal, EU leaders met again in Brussels to discuss a second delay. The only question was how long should it be? In the end, the UK and EU agreed to a "flexible" extension until October 31 — which can end sooner if the Brexit deal is approved. The UK had to take part in EU elections in May because their exit wasn't secured in time.
Image: Reuters/E. Plevier
May 2019: Prime Minister Theresa May resigns
Weeks of talks between Prime Minister Theresa May and the Labour party to reach a deal proved unsuccessful and further eroded her political capital. She triggered an angry backlash from her party after she tried to put the option of a second referendum on the table. The series of failures led May to announce her resignation, effective June 7, in an emotional address.
Image: Reuters/H. McKay
June 2019: Search for a new prime minister
After Theresa May announced on June 7 that she would leave office, other members of her Conservative party began clamoring for the top job. Within a month, the leadership battle came down to Jeremy Hunt (left), an EU proponent who fears a no-deal scenario, and Boris Johnson (right), one of the main proponents of Brexit.
July 2019: Prime Minister Boris Johnson
At the end of July 2019, Johnson was officially named Theresa May's successor as British prime minister. "We are going to energize the country, we are going to get Brexit done by October 31," he said after he was elected leader of the Conservative Party.
Image: Imago Images/Zuma/G. C. Wright
September 2019: Johnson's election threat
Conservative rebels and opposition MPs backed efforts to delay an October 31 Brexit deadline in fear of a no-deal departure. In response, Johnson called for a general election, saying his government cannot rule without a mandate after he stripped 21 rebel MPs of their Conservative status. The Labour Party said it would not back elections until legislation to block a no-deal Brexit was in place.
In late September, Britain's highest court ruled that Johnson's decision to suspend Parliament ahead of the UK's planned exit was unlawful. "This was not a normal prorogation in the run-up to a Queen's Speech," said the Supreme Court. Political rivals immediately called on Johnson to leave his post. Johnson said he would abide by the court ruling, though said he "strongly" disagreed.
Image: Reuters/H. Nicholls
October 2019: A new deal
British Prime Minister Boris Johnson managed to secure a deal with European negotiators that would allow the UK to leave the EU in an orderly manner. The deal received unanimous backing from the leaders of 27 other member states. But an attempt to get the UK Parliament to sign off on the deal failed. Instead, Parliament pushed for the Brexit deadline to be extended until the end of January 2020.
Image: picture-alliance/AP Photo/F. Augstein
December 2019: Lawmakers vote for Johnson's Withdrawal Bill
On December 22, UK lawmakers vote for Prime Minister Johnson's European Union withdrawal bill, which will see a leave date of January 31 2020 enshrined in law. Getting a majority to vote to pass the bill in the lower house has proven a major sticking point for the PM, but following a general election Johnson's Conservative party won control of the house and the bill passed with a 124 majority.
Image: picture-alliance/empics/House of Commons
December 2020: EU, UK 'finally' reach trade deal
After months of disagreements over fishing rights and future business rules, the EU and UK clinched a post-Brexit trade deal on Christmas Eve. Prime Minister Boris Johnson hailed the deal, saying the UK has "taken back control of our laws and our destiny." The deal will allow the UK and the EU to trade without tariffs, but also impose limitations on free movement and financial services.
