This Is the New Brexit Deal the U.K.'s Theresa  May Got From the EU

(Bloomberg) -- Theresa May didn’t get the two things she wanted most when the prime minister announced that she’d go back to the European Union to ask for concessions on the Brexit deal.

She didn’t get the power to unilaterally exit the much-hated backstop arrangement aimed at preventing a hard Irish border. Nor did she get a time limit placed on it.

However, wording in a legally binding joint statement goes as far as the EU says is possible in reiterating that the backstop -- an insurance policy that effectively keeps the U.K. in a customs union with the EU -- is only meant to be temporary. And it gives the U.K. some authority to walk away if the EU doesn’t do enough to replace it with a full trade deal.

• The statement says that under the dispute settlement system -- set out in the original main deal -- the independent arbitration panel (comprising senior judges) could rule that the EU is acting in such a way as to make the backstop last indefinitely.
• The document says that “persistent failure” to comply with a ruling “may result in temporary remedies.”
• This doesn’t go as far as meeting the demands of Attorney General Geoffrey Cox. He wanted the EU to agree to give the arbitration panel to power to scrap the backstop in these circumstances. He was rebuffed.
• But the joint document does go on to say that the U.K. (or EU, for that matter) would “ultimately” have the right “to enact a unilateral, proportionate suspension of its obligations under the Withdrawal Agreement” including the backstop.
• This would “remain in place unless and until the offending party has taken the necessary measures to comply with the ruling of the arbitration panel.”
• This is also a reiteration of the main Brexit divorce deal agreed in November. That states that a suspension of obligations “shall be temporary and shall be applied only until” the matter has been rectified.
• The U.K. also published a separate document, “interpreting” the joint statement in its own wording but with the tacit consent of the EU.
• It says that if the two sides aren’t able to conclude a free-trade deal that supersedes the backstop “nothing in the Withdrawal Agreement would prevent it from instigating measures that could ultimately lead to disapplication” of backstop obligations.

To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net;Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Flavia Krause-Jackson

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