UK and EU strike Brexit transition deal

A Scottish Saltire (C) flies between a Union flag (R) and a European Union (EU) flag, in front of the Scottish Parliament building in Edinburgh, on March 3, 2017. Scotland's announcement on Monday that it will begin preparations for a new independence bid raised the spectre of one of Brexit's most feared consequences -- the end of the United Kingdom. / AFP PHOTO / Lesley Martin (Photo credit should read LESLEY MARTIN/AFP/Getty Images)

The UK has reached a joint legal agreement with the European Union on the legal terms of a Brexit transition deal, a milestone development in the tortured negotiations to extricate Britain from the bloc.

Speaking at a news conference in Brussels on Monday, the EU’s chief negotiator Michel Barnier said agreement on the draft legal text for withdrawal was a “decisive step” towards Brexit.

He said the text, to be presented to EU heads of government on Friday, will be “the international agreement for an ordered withdrawal of the UK from the EU.”

The announcement came after “intense” negotiations between technical and legal experts from both sides over the past few days, Barnier said.

Speaking alongside the UK’s Brexit Secretary David Davis, Barnier said: “What we are presenting today is a joint legal text, which to my mind constitutes a decisive step.”

Davis added that “a good deal for the UK and the European Union is closer than ever before.”

Transition deal

The provisional accord, which is not yet set in stone, includes the terms for a 21-month transition period after Brexit, which is scheduled to happen on March 29, 2019, to allow business to adjust.

In what could be seen as a big win for the UK, the draft agreement confirms, “during the transition period, the United Kingdom may negotiate, sign and ratify international agreements… provided those agreements do not enter into force or apply during the transition period, unless so authorized by the Union”.

Sterling jumped against the euro on the news as the markets cheered the announcement.

Ireland still a problem

One sticking point that could unravel the agreement is the issue of the border between the Republic of Ireland, which is, and will remain a part of the EU and Northern Ireland, which is part of the UK.

“We must have a workable and practical solution to avoid a hard border and protect north south cooperation,” Barnier said.

Barnier said the UK has agreed in principle to the EU’s “backstop” plan for the status of the Irish border, under which Northern Ireland would

remain part of the EU’s customs union if there is no better idea to maintain the seamless flow of goods and people across the border.

The EU is concerned a “hard border” between Ireland and Northern Ireland, believing it could jeopardize the 1998 peace accord that ended decades of sectarian violence in the UK province.

“We agreed today that the backstop solution must form part of the legal text of the withdrawal agreement,” Barnier said.

The remaining 27 EU countries insist that the must agree to terms on Northern Ireland before it will sign off on the final version of the divorce agreement and move on to future trade agreements between the UK and the EU, its largest trading partner.

Barnier will this week discuss the agreement with EU foreign ministers, the European Commission and on Friday, EU heads of government, apart from UK Prime MInister Theresa May who is not invited.

The-CNN-Wire