Brexit Update: UK and EU broker fresh agreement on Brexit

Two weeks to the day of the UK’s departure from the European Union ("EU"), the UK and the EU have negotiated an agreement to manage the UK’s exit from the bloc on 31 October 2019. Today’s agreement involves a revised protocol on Ireland and Northern Ireland in the Withdrawal Agreement and a revised political declaration on the future relationship between the EU and the UK.

The European Commission’s chief Brexit negotiator, Michel Barnier, stated today that negotiations over recent days, while fraught, were focused on securing “a legally operative solution in the legal agreement that would avoid a hard border between Ireland and Northern Ireland, preserve the whole-island economy and protect the integrity of the Single Market.”

Mr Barnier continued to outline four main elements within the agreement reached today:

1. Applicable Procedures in Northern Ireland

Northern Ireland is to remain aligned to a limited set of EU rules, notably regarding goods. All applicable procedures concerning goods will take place at the point of entry into Northern Ireland and not across the island. UK authorities will be responsible for applying the EU customs code in Northern Ireland. 

2. Customs Duties

Northern Ireland is to remain in the UK’s customs territory and will be subject to the UK’s future trade policy but Northern Ireland will also remain an entry point into the European Single Market.

UK authorities can apply UK tariffs on products coming from third countries as long as such goods entering Northern Ireland are not at risk of entering the Single Market via the Republic of Ireland. Those goods at risk of entering EU will be subject to EU tariffs.

3. VAT

VAT arrangements were agreed that seek to avoid distortion of competition in the Single Market while balancing the EU’s desire to maintain the integrity of the European Single Market with UK interests.

4. Future Review by Stormont

Ireland and the UK sought to ensure long-term democratic support for the application of EU rules in Northern Ireland. Four years from entry into force of the protocol, Northern Ireland’s elected representatives will review operation of the application of EU rules and may decide by simply majority whether to continue applying them.   

What’s next?

Before the revised withdrawal agreement can  take effect from 1 November 2019, it must be ratified by both the European Council and the UK Parliament. Jean-Claude Juncker, President of the European Commission, took to Twitter this morning to urge the European Council to endorse the deal. A special sitting of the UK parliament is expected to take place on Saturday to consider the new proposals. Two UK political parties, the DUP and the Labour Party, have already signalled that they will not be supporting the revised withdrawal agreement. 

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