Progress of a sort in the Brexit negotiations with the EU as some key points were penciled in on Friday. While the joint announcement by Prime Minister May and European Commission President Jean-Claude Juncker, on Friday, fell far short of a friendly event, it did mark an end to the impasse which had plagued the negotiations.
The European Commission published a Joint Report from the negotiators of the European Union and the United Kingdom Government to serve as the basis for further discussion at the European Council meeting of the 14th and 15th of December.
Under the agreement, the rights of EU citizens residing in the UK would be protected as would the rights of UK citizens living in the EU. The UK courts would be responsible for enforcing the rights of EU citizens but would be able to refer any cases to the European court of justice.
Following the disastrous results in the June elections, Mrs. May was forced into a coalition government with Northern Ireland’s DUP (Democratic Unionist Party).
Under the terms of Brexit, the whole of the UK, which includes Northern Ireland, would be leaving the customs union. The Republic of Ireland would continue to be a member, raising the question of the border between Northern Ireland and the Republic.
Under the terms of the Friday announcement, there will be no “hard border,” but the UK will be responsible for the full enforcement of the customs union terms.
The UK will remain responsible for agreed payments to the EU budget post-Brexit for 2019 and 2020 and will continue with ongoing liabilities such as pension contributions. The divorce settlement is expected to top £50bn.
While this falls short of a finalized deal, it comes as a very welcome relief following months of fruitless and frustrating negotiations. The impasse had reached the point where many Conservative MPs were calling for negotiators to walk away from the discussions and opt for a “hard Brexit” and return to WTO (World Trade Organisation) deals.
While the Pound has lost ground against other major currencies, this has helped exports with the UK’s economy chalking up a 0.5 percent growth in the three months leading up to November, with official data showing an increase of exports to non-EU countries with the deficit to these nations shrinking by £3bn.
For the same period trade deficit between the UK and imports from the EU rose by almost £2bn and these numbers suggest that trade from the EU into the UK will figure highly in any final Brexit deal.
It may still turn out to be a messy divorce, but Friday’s announcement marks the first time the two sides walked any kind of common ground. There is still a very long way to go, but for now, at least, the UK and the EU seem to be moving in the same direction.
This article is for educational and informative purposes only and should not be considered as investment or trading advice.