While you were settling in to enjoy Christmas Eve, the UK and European Union finally agreed a deal that will define their future relationship.
Ever since the UK left the the EU on 31 January, both sides have been talking about what the new rules should be.
The negotiations went to the wire, as the current arrangement ends on 31 December.
What do we know about the deal?
The deal contains new rules for how the UK and EU will live, work and trade together. But we don’t know a lot of the detail yet because the full document – expected to be well over 1,000 pages long – has not been released.
What we do know is that it means:
- No taxes on each other’s goods when they cross borders (known as tariffs)
- No limits on the amount of things which can be traded (known as quotas)
European Commission president Ursula Von der Leyen said competition rules – designed to prevent one side gaining an unfair advantage – “will be fair and remain so”.
She said the UK and EU will “continue co-operating in all areas of mutual interest, including things like climate change, energy, security and transport”.
We also know the UK will not be taking part in the Erasmus exchange programme for students.
Why did the deal take so long?
Because so much was at stake.
The EU is the UK’s nearest and biggest trading partner, The UK government says the deal covers trade that was worth £668bn in 2019.
While the UK was in the EU, companies could buy and sell goods across EU borders without paying tariffs.
Without the deal, businesses would have had to start paying these taxes, which would have added to their costs.
No deal would have also meant even more border checks, which could have caused delays for lorries transporting products.
What happens next?
Even though the deal has been agreed, it still needs to be made law.
For that to happen it must be looked at and approved by both the UK and European parliaments.
As it’s been left so late, the European Parliament won’t have time to sign it off before the end of the year. That shouldn’t stop the deal coming into force on 1 January, but it will take longer before it’s officially rubber-stamped.
The UK government says it will summon MPs back on 30 December to vote on the deal. However, there wouldn’t be time to debate and look at the details closely.
And in one sentence?
Both sides are relieved there is a deal, but people and businesses don’t have much time to prepare for the changes starting on 1 January.
What are the EU and Brexit?
The EU is made up of 27 European countries.
EU citizens are free to live and work in other EU countries, and firms in those countries can buy and sell each other’s goods without checks or extra taxes at borders.
The UK was the first country to leave the EU and this was known as Brexit – British exit.
Brexit happened because a public vote – or referendum – was held in June 2016, to decide whether the UK should be in the EU.
What Brexit words mean
The last few years have seen many words and phrases enter our lives. We haven’t used them here, but politicians do use them. Here’s what some of them mean:
Transition period: The 11-month period following the UK’s exit from the EU (finishing at the end of 2020), during which time the UK has followed EU rules, to allow leaders to make a deal
Free trade agreement: This is what the EU and the UK have now agreed – a deal between countries that encourages trade by getting rid of barriers like taxes on goods
WTO rules: If countries don’t have free trade agreements, they must trade according to rules set by a global body called the World Trade Organization (WTO), which can mean taxes on goods