Britain’s Prime Minister Theresa May (L) sits with Britain’s Former Foreign Secretary Boris Johnson.
LEON NEAL | AFP | Getty Images
BRUSSELS — The European Union and the United Kingdom announced a new deal that will allow the latter to leave the political and trading union, provided that the U.K. Parliament approves it.
This is the second Withdrawal Agreement that both sides have put together, after the first was rejected three times by U.K. lawmakers.
CNBC takes a look at what has changed in the deal.
- Under the revised deal, Northern Ireland will be part of the U.K. customs territory – not the European customs region. Some U.K. lawmakers had rejected the previous deal because Northern Ireland would have been in a separate customs area from the rest of the United Kingdom.
- Nonetheless, under the new deal, Northern Ireland will still have to apply certain EU rules, including on agricultural products.
- Northern Ireland will have to provide “democratic consent” in order for this agreement to continue to apply in the future. Specifically, the Northern Ireland assembly (the devolved legislature in the country) will be able to vote on whether to continue with this arrangement four years after the transition period ends in December 2020. According to Michel Barnier, the EU’s Brexit negotiator, this democratic vote is “a cornerstone” of the newly agreed approach. Often, throughout the Brexit process, lawmakers from Northern Ireland, had insisted they should have a say on its post-Brexit future.
Other points included in the new agreement include:
- Products from Northern Ireland can be branded “from Great Britain.”
- The U.K. will collect VAT (valued-added tax) from Northern Ireland, meaning revenues that result from transactions that are taxable in Northern Ireland shall not be remitted to the EU.
- There will be a new working group to oversee application of this protocol, meeting once a month and co-chaired by the EU and the U.K.
At a press conference, earlier on Thursday, Barnier explained that this was a brand-new deal that avoided the need for a previous insurance policy developed in case trade talks failed in the future, the controversial so-called called “Irish backstop”. However, there are still doubts as to whether this revised agreement will get approved by U.K. lawmakers, when they gather Saturday.