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Brexit Withdrawal Treaty Explained: What the EU and UK have agreed on

Theresa May Brexit treaty divorce withdrawal EU and UK customs union

The European Commission and the United Kingdom’s negotiators have reached an agreement on the entirety of the “Withdrawal Agreement of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community”. After March 29 next year, the Brexit withdrawal treaty will be Britain’s only legal agreement with the EU, a union with which it has shared sovereignty since 1973.

To come into force, the deal requires approval by the UK cabinet, an EU summit, the House of Commons and the European Parliament.

Theresa May Brexit treaty divorce withdrawal EU and UK customs union

The Withdrawal Treaty

Running to more than 500 pages, the provisional text agreed by London and Brussels unwinds 45 years of deep integration, protecting certain rights, defining outstanding obligations and establishing a transition period in which both sides can adjust.

Financial Settlement

  • Britain will honour all its financial commitments to Brussels so that no EU country pays a euro more to the common budget as a result of Brexit.
  • Conservative assumptions expect British to outlay 40 to 45 billion euro.
  • The UK will pay into EU budgets for 2019 and 2020 as if it were still in the bloc. It will subsequently “contribute its share of the financing” for any outstanding EU liabilities as they fall due.

Citizen Rights

  • Maintains the existing EU residence and social security rights of more than 3 million EU citizens in the UK and about 1 million UK nationals living across the continent.

Northern Ireland

  • Unique arrangements for Northern Ireland, with the aim of upholding the peace process and avoiding a hard border dividing the island of Ireland.
  • The provisions bind Northern Ireland to the EU’s customs code and single market rules.
  • The UK also makes unilateral promises to minimise divergence with Northern Ireland by adhering to EU single market rules for goods, so keeping open the flow of trade to the British mainland.

UK-EU Customs Union 

  • A UK-EU Customs union deal avoids the need for any customs checks across the Irish sea. Northern Ireland will have access to total free movement of goods within the EU, therefore meaning no borders required. The UK however, would have to apply a less extensive version of this customs union model.
  • This avoids the needs for tariffs, quotas and rules of origin in UK-EU trade.
  • The UK commits to follow EU competition rules and promises to keep some existing laws on labour, environment and taxation. Trade in fish is excluded from the customs union until a future UK-EU agreement is reached on reciprocal access to waters.

Governance

  • The European Court of Justice (ECJ) has the final say on the bloc’s laws. This ensures that neither the EU nor the UK is bound by the other jurisdiction’s courts when it comes to interpreting the agreement. However, any matters of EU law must be referred to the ECJ, ensuring that the tribunal’s interpretation prevails on the union’s rules.

The Transition Period

  • Transition period until the end of 2020, which can be extended for an unspecified one-off period, set by mutual agreement.
  • During this period Britain would leave the political institutions of the EU, losing its say over rules and decisions. But it would continue to apply EU law in full.

Controversies surrounding the deal

People that view this deal as a betrayal of Brexit says the deal is worse than staying in the EU mainly due to the customs union aspect of the agreement. Through the treaty, the UK will be bound by customs union regulations without having any say in the European Parliament. To stay within the customs union, the UK will need to follow all EU regulations on competition and promise to maintain EU’s existing laws on taxation, environment and labour. UK’s fishing waters, which is arguably the biggest cause of Brexit, is not included in the customs union deal. The fishing waters are being excluded until the UK and the EU can reach a reciprocal deal with access to each other’s waters.

The UK will technically remain within the customs union.

Northern Ireland is said to get an even worse deal than Great Britain. Northern Ireland is going to be bound by all of the EU customs code and single market rules. Until a new deal is reached if ever, Northern Ireland is going to be treated differently than mainland UK. This was something PM May specifically say won’t happen.

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