Britain and the European Union have struck a provisional free-trade agreement that should avert New Year’s chaos for cross-border commerce and bring a measure of certainty to businesses after years of Brexit turmoil.

In this file photo taken on June 28, 2016 a man waves both a Union flag and a European flag together on College Green outside The Houses of Parliament at an anti-Brexit protest in central London.
In this file photo taken on June 28, 2016 a man waves both a Union flag and a European flag together on College Green outside The Houses of Parliament at an anti-Brexit protest in central London. (AFP)

Britain and the European Union have agreed to a Brexit trade deal, just seven days before the UK exits one of the world's biggest trading blocs in its most significant global shift since the loss of empire.

"The deal is done" UK Prime Minister Boris Johnson tweeted with a photo of himself, his arms held aloft in victory, after clinching a free-trade deal with the European Union on Thursday at the eleventh hour.

"All of our key red lines about returning sovereignty have been achieved," Johnson said.

The trade deal is "fair, balanced and right" and worth fighting for, the bloc's chief executive Ursula von der Leyen tweeted.

"It was a long and winding road. But we have got a good deal to show for it. It is fair, it is a balanced deal, and it is the right and responsible thing to do for both sides," Von der Leyen told a news conference.

"The negotiations were very difficult. A lot was at stake for so many people, so this was an agreement that we absolutely had to fight for," she added.

"I believe, also, that this agreement is in the United Kingdom's interest. It will set solid foundations for a new start with a long-term friend. And it means that we can finally put Brexit behind us, and Europe is continuing to move forward."

"Deal is done," a Downing Street source said on Thursday. "We have taken back control of our money, borders, laws, trade and our fishing waters."

"The deal is fantastic news for families and businesses in every part of the UK. We have signed the first free trade agreement based on zero tariffs and zero quotas that has ever been achieved with the EU," the Downing Street sources added.

Now, Johnson will be able to claim to have delivered on the promise that won him a resounding election victory a year ago: “Get Brexit Done.”

READ MORE: EU, UK struggle to resolve Brexit trade impasse

Britain formally left the EU in January after a deeply divisive referendum in 2016, the first country to split from the political and economic project that was born as the continent rebuilt in the aftermath of World War II.

London remains bound by the EU's rules during a transition period that runs until midnight on December 31, when the UK will leave the bloc's single market and customs union.

The final 2,000-page agreement was held up by last-minute wrangling over fishing as both sides haggled over the access EU fisherman will get to Britain's waters after the end of the year.

Parliamentary approvals

Following the announcement of the political accord, Von der Leyen's Commission sent the text to EU member states.

They are expected to take two or three days to analyse the agreement and decide whether to approve its provisional implementation.

The UK parliament will interrupt its end of year holidays to vote on the deal on December 30, a day before the cut-off.

Once it is signed off and the text published in the EU's official journal it will go into effect on January 1 when Britain has left the bloc's single market.

The European Parliament will then have a chance to retrospectively approve the deal, at some point in 2021, EU officials said.

New regulations 

The 11th-hour deal heads off the threat that Britain could crash out of the club after 47 years of shared history with no follow-on rules.

With Britain outside the EU single market and customs area, cross-Channel traders will still face a battery of new regulations and delays.

Economists expect both economies, already weakened by the coronavirus epidemic, to take a hit as supply chains are disrupted and costs mount.

But the threat of a return to tariffs will have been removed, and relations between the former partners will rest on a surer footing.

It is also a success for Von der Leyen and her chief negotiator Michel Barnier, who led almost 10 months of intense talks with Britain's David Frost.

Trade rivals after 47 years of shared history

After the 2016 referendum, in which British voters chose to leave the union, Brexiteers boasted that they could win the "easiest trade deal in history".

The argument was that, after conducting business according to EU standards and regulations for so long, the economies would be a good fit for each other.

But European capitals were concerned that if such a large rival on their doorstep were to deregulate its industry their firms would face unfair competition.

Brussels insisted the only way to keep the land border between Ireland and the UK open was to keep Northern Ireland, a British province, within its customs union.

And members baulked at giving up access to Britain's rich fishing waters, which support fleets in France, Belgium, Denmark, Ireland and the Netherlands.

It was the question of fish that emerged as the last stumbling block as late as this week when member states – led by France – rejected a UK offer.

London pushed to reduce EU fishing fleets' share of the estimated 650-million-euro annual haul by more than a third, with changes phased in over three years.

The EU, in particular countries with northern fishing fleets like France, Denmark and the Netherlands – was insisting on 25 percent over at least six years.

It is not yet clear what the numbers are in the final deal, but European diplomats stressed that they would not have signed off on it unless the UK gave ground.

Barnier briefed ambassadors and then senior MEPs on Tuesday that he had made his last offer on fish and that it was now up to political leaders to decide.

This triggered a round of telephone calls between Johnson and von der Leyen that led to Wednesday's night's pre-Christmas compromise.

Frantic negotiations

Negotiators from the European Union and Britain worked through Wednesday night and into Thursday, Christmas Eve, to put the finishing touches on a trade deal that should avert a chaotic economic break between the two sides next week. 

Both sides worked furiously to avoid a nightmare scenario, in which the imposition of tariffs and duties would have cost billions in trade and hundreds of thousands of jobs and potentially so snarl ports that many goods would struggle to get through.

That possibility was starkly illustrated this week when a brief French blockade of British trucks over coronavirus concerns created chaos at ports that is still being sorted out.

After resolving nearly all of the remaining sticking points, negotiators combed through hundreds of pages of legal text on Thursday that will become the blueprint for a post-Brexit relationship.

It has been 4.5 years since Britons voted 52-48 percent to leave the EU in order to, in the words of the Brexiteers’ campaign slogan, “take back control” of the UK’s borders and laws.

It took more than three years of wrangling before Britain left the bloc’s political structures on January 31. 

Negotiating how to disentangle economies that were closely entwined as part of the EU’s single market for goods and services took even longer.

READ MORE: EU, UK demand concessions as post-Brexit talks stall

A greater hit for Britain

The EU has long feared that Britain would undercut the bloc’s social, environmental and state aid rules to be able to gain an unfair edge with its exports to the EU. 

Britain has said that having to meet EU rules would undercut its sovereignty.

Compromise was finally reached on those “level playing field” issues, leaving the economically minor but hugely symbolic issue of fish to be the final sticking point. Maritime EU nations are seeking to retain access to UK waters where they have long fished, but Britain has been insisting it must exercise control as an “independent coastal state.”

A huge gap between the two sides on fishing was gradually narrowed until it was, at last, bridged.

Johnson’s large Conservative majority in Parliament will ensure that the Brexit trade agreement passes, but any compromises will be criticised by hardline Brexit supporters in his party. 

The party’s eurosceptic European Research Group said it would carefully scrutinise the deal “to ensure that its provisions genuinely protect the sovereignty of the United Kingdom after we exit the transition period at the end of this year.”

The European Parliament warned earlier it was too late for it to approve the deal before January 1, but an agreement was provisionally be put in place and approved by EU legislators in January.

Businesses on both sides are clamouring for a deal that would save tens of billions in costs.

While both sides would suffer economically from a failure to secure a trade deal, most economists think Britain would take a greater hit, because it is smaller and more reliant on trade with the EU than the other way around.

READ MORE: France relaxes two-day Covid-19 blockade of cargo and passengers from UK

Source: TRTWorld and agencies