Early Optimism Fades After EU-UK Agree Post-Brexit Terms

Update: Irish Minister Harris comments in a brief speech that May will face difficult days ahead, and a Labour Party official confirms that May's deal does not offer enough to win their support.

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Britain and the European Union have agreed a draft text detailing a close post-Brexit economic relationship, paving the way for a summit of EU leaders to endorse the deal on Sunday.

May briefed her Cabinet and announced the deal outside of her Downing Street residence.

“The British people want this to be settled. They want a good deal that sets us on course for a brighter future. That deal is within our grasp and I am determined to deliver it,” she said.

As Sky News Faisal Islam reports, the new text is 26 pages long, meaning 5 additional pages were added since the UK Cabinet saw it on Tuesday, and promises a "broad deep and flexible partnership across trade and economic cooperation”

Summit chair Donald Tusk said:

“It has been agreed at negotiators’ level and agreed in principle at political level.”

Bloomberg describes the key points of the latest (and perhaps final) agreement as follows:

  • The Parties envisage comprehensive arrangements that will create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.

  • It should "build and improve on the single customs territory provided for in the Withdrawal Agreement which obviates the need for checks on rules of origin.

  • Financial services ties to be based on equivalence. Work will start as soon as possible to avoid disruption

  • Parties to explore possibility of cooperation between U.K. and regulatory agencies such as EMA, EASA

  • On the Irish backstop: The Parties recall their determination to replace the backstop solution on Northern Ireland by a subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing. (That’s an upgrade to the previous language.)

  • In another boost for Brexiteers, the draft refers to "all available facilitative arrangements and technologies," to ease customs procedures.

  • The transition period, which Britain and the EU hope will begin once Britain leaves the EU on March 29, can be extended “for up to one or two years,” according to the draft declaration.

The text isn’t legally binding, unlike the treaty that governs the divorce, which it where the most unpalatable bits of the agreement are nestled.

The question now - as May begins to sell this deal domestically - is whether her opponents can be convinced this is the best deal possible. On the bright side, as Bloomberg notes, the deal offers May some points to help her sell it at home.

First, it gives industry what it wanted as it points the way to easy trade for goods, calling for "a free trade area, combining deep regulatory and customs cooperation."

For Brexiteers - her most vocal opponents - it hints that the U.K. will be able to pursue its own trade policy and also stop free movement of people.

It also offers a way out of the most toxic part of the divorce deal - the Irish backstop that opponents of all political colors oppose as it risks keeping the U.K. shackled to the EU’s orbit indefinitely.

And for Brexiteers there’s also a line about how technology will come into its own in the future, solving problems that hardliners have long said hi-tech could fix.

As the following shows, she faces an uphill battle no matter what.

There is however, one other problem. As this agreement now heads to the summit of EU leaders, Spanish officials are still in negotiations on the Brexit text.

EU Commission Margaritis Schinas told reporters that the issue of Gibraltar - a sticking point because of Spanish claims - and fishing access still needed to be agreed and the ball is now in the court of EU member states. Spain says talks are still under way.

All of which likely explains why, despite an initial burst higher, cable is leaking back to reality...

We won't be holding our breath over the weekend for the summit's agreement but this is progress and a win for May, coming at an opportune time amid the constant hubbub of leadership challenges.