Scoring a win for Britain on Monday, head Brexit negotiator David Davis agreed to a deal with the European Union toward the former’s “orderly withdrawal” from the latter.
It’s an important moment in the negotiations between the two powers, in that this deal handles transition period between March 29, 2019, (when Britain leaves the EU) and Dec. 31, 2020, when a full break and a permanent relationship will come into force.
This is especially good news for the markets. As reflected by the pound’s strong performance on Monday, the news has spurred increasing optimism that Brexit might occur without a fundamental breakdown in U.K.-EU economic relations. That had been a top priority for Prime Minister Theresa May’s government.
The deal also clarifies that May will be allowed to negotiate trade deals with other nations during the transition period. This gives space for the British to sign a landmark agreement with major economies such as those of India and the U.S. Both nations have been top priorities for Britain’s skilled trade minister, Liam Fox. Of course, Britain hasn’t got everything it wanted.
For the duration of the transition period, the U.K. has had to surrender sovereignty rights over legal matters involving EU citizens. This means that the European Court of Justice will continue to hold influence over British legal life, even after the U.K. leaves the EU.
In addition, matters pertaining to the border between the Republic of Ireland (an EU member state) and Northern Ireland (British territory) will have to be addressed in the future. Still, this is a clear win for May.
Just a few months ago, the status of negotiations seemed leaning toward deadlock. Since then, however, the prime minister has made steady progress on issues which will help define whether Brexit is positive or negative for British interests.
Moreover, in her successes, May is drawing an increasingly sharp line between her leadership and that of her opponent, Jeremy Corbyn.
