Draft Deal Points to Deep Ties, Rule Cooperation: Brexit Update

(Bloomberg) -- A draft agreement on post-Brexit ties has been agreed at "political level" according to the EU. It points to close cooperation and free-trade and includes some key concessions that could help Prime Minister Theresa May sell it at home. The pound rose.

U.K. Lawmakers Begin to Respond (12:15 p.m.)

Back in the U.K., lawmakers are starting to react to the leaked draft. Nicky Morgan, a pro-EU Tory who’s rebelled in the past against May’s Brexit strategy, said in a text message the document looks "pretty comprehensive."

The deal “demonstrates the PM’s desire for an enduring partnership between the U.K. and EU is possible," she said.

No Vote Before 3 December? (Noon)

Leader of the House of Commons, Andrea Leadsom, declined to give a date for the vote on the Brexit deal, but one lawmaker has calculated it will need to be after Dec. 3, based on recommendations from Parliament’s Procedure Committee.

"If the debate on the meaningful vote is to start on December 3, the business of the house motion should have been published yesterday,” says Michael Tomlinson.

Leadsom says the government is still considering its response to the committee. “It will be for Parliament for debate and determine the procedure that will apply for the vote.”

Draft Sees Regulatory Cooperation (10:45 a.m.)

The draft on future ties sets out regulatory cooperation "while preserving regulatory autonomy."

"The Parties will also explore the possibility of cooperation of United Kingdom authorities with Union agencies such as the European Medicines Agency (EMA), the European Chemicals Agency (ECHA), and the European Aviation Safety Agency (EASA)."

This was one of May’s key asks, and one the EU had initially said couldn’t be accepted.

Deep, Close Ties and a Way Out of Backstop (10:30 a.m)

The draft agreement on future ties sets out a future relationship based on "a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition."

It also has some strong language that’s probably aimed at appeasing May’s critics at home. The insurance policy to keep the Irish border open, known as the backstop, has been toxic for May as opponents on all sides have said it will keep the U.K. trapped in the EU’s orbit.

"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," according to the draft, seen by Bloomberg.

The pound surged.

Draft Shows Determination to Replace Backstop (10:16 a.m.)

  • EU, U.K. State Determination to Replace Irish Backstop
  • EU, U.K. See Free-Trade Area, Deep Regulatory Cooperation

EU Commission Approves Draft Declaration (9:50 a.m.)

The European Commission has endorsed the political declaration on the future relationship between the U.K. and EU.

This is a step, as it indicates there’s a draft in circulation. But it’s still not a done deal until the U.K. and the EU’s 27 remaining governments agree to it together.

Health Secretary Says Talks With EU are Going Well (8:45 a.m.)

Speaking in a BBC Radio 4 interview Thursday, Health Secretary Matt Hancock dismissed a suggestion that an agreement may not be ready in time to be signed off at a planned summit on Sunday.

“My understanding is that good progress was made last night,” he told the “Today” program. “Clearly we’ve got to get as good a deal as we can at this stage and also work on those alternative arrangements to make sure withdrawal is as effective as possible and we get into the future relationship that everyone wants to see.”

Hancock, a staunch defender of May’s draft deal, said the pattern of EU negotiations is that agreements are often not clinched until the very last minute.


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