Britain, EU agree on draft Brexit declaration for future ties

Britain and the European Union have agreed in principle to a text setting out their future relationship that can be endorsed by EU leaders at a summit, European Council President Donald Tusk said on Thursday.

Britain is due to leave the EU on March 29, 2019 and diplomats are trying to finish a divorce deal and the accompanying outline of their future relationship so that EU leaders can rubber-stamp them at a summit on Sunday (November 25).

The pound rose nearly one percent to hit a day's high of $1.2894.

Also on Thursday, British Prime Minister Theresa May hailed the agreement for future ties between London and Brussels as "the right deal" for Britain and said she was "determined to deliver it".

"This is the right deal for the UK," she said after updating the cabinet on the text of a declaration on UK-EU post-Brexit relations.

TRT World's Simon McGregor-Wood reports from London

"The Commission president has informed me that it has been agreed at negotiators' level and agreed in principle at political level, subject to the endorsement of the leaders," Tusk said.

He said the text had been discussed on Wednesday by British prime minister and European Commission President Jean-Claude Juncker.

According to the draft declaration agreed by the United Kingdom and the European Commission, the "parties envisage having a trading relationship on goods that is as close as possible, with a view to facilitating the ease of legitimate trade."

The draft declaration will now be screened by national envoys of the remaining 27 EU states meeting in Brussels on Thursday.

Both the EU and Britain "should aim to deliver a level of liberalisation in trade in services well beyond the parties’ WTO commitments," according to the draft declaration.

The transition period, which Britain and the EU hope will begin once Britain leaves the EU on March 29, can be extended "for up to one or two years," according to the draft declaration.

But German Chancellor Angela Merkel didn't seem convinced. 

Speaking in Berlin, she said Britain still had a lot of negotiating to do.

"We've made a bit of progress, but it will take a lot more discussion, especially in Britain," she said.

"As member states we can only do two things: deal with Britain in a friendly spirit of partnership, and hold together as the remaining 27 and not allow any upheaval amongst us."