(CN) — Four and a half years after the Brexit referendum, the United Kingdom and the European Union reached a last-minute trade deal on Thursday that will ease tensions between the two sides and keep goods flowing.
The deal was reached just one week before the U.K. officially begins its new era outside of the EU on Jan. 1 and ends months of tense negotiations that seemed at various points on the verge of collapsing into chaos. Without a deal, tariffs and other trade barriers were expected to be imposed, driving a deep wedge between the two sides.
The agreement, which still needs to be ratified by the British and European parliaments, largely allows about $900 billion in trade to continue uninterrupted across the English Channel, lifting a major shadow over Britain's future.
Both sides hailed the deal as the best outcome and claimed victory. But details about the complex deal, covering hundreds of pages, were still under wraps on Thursday afternoon and it may take days before all the interested parties and experts have had a chance to sift through the document.
Under the free trade deal, the EU and the U.K. also are agreeing to cooperate on economic, social, environmental, fisheries and security issues and establishing an “overarching governance framework,” according to an outline of the agreement provided by the EU. The deal does not cover issues related to cooperation on foreign policy, external security and defense, the EU said.
“We have finally found an agreement. It was a long and winding road, but we have got a good deal to show for it,” said Ursula von der Leyen, the president of the European Commission, at a news conference in Brussels. “It is fair, it is a balanced deal and it is the right and responsible thing to do for both sides.”
She stressed that the agreement protects the EU's interests by ensuring that British companies play by the same rules EU businesses use.
“The EU rules and standards will be respected,” she said. “We have effective tools to react if fair competition is distorted and impacts our trade.”
A major concern for the EU is to prevent U.K. companies from producing goods using different standards and thereby undercutting EU companies.
The agreement sets up a system to settle disputes and allows each side to seek to impose tariffs and quotas.
After months of discord and frustration, both sides struck a conciliatory tone on Thursday.
“It's time to turn the page and look toward the future. The United Kingdom is a third country,” Von der Leyen said. “But it remains a trusted partner; we are longstanding allies, we share the same values and interests.”
She expressed both relief that a deal was achieved and sadness that British voters chose to break ties with the EU in the 2016 Brexit referendum.
British Prime Minister Boris Johnson presented the deal as a benefit for both sides.
“This is I believe a good deal for the whole of Europe,” he said at a news conference at No. 10 Downing Street. “It will not be a bad thing, in my view, for the EU to have a prosperous and dynamic and contented U.K. on your doorstep ... I don't think it would be a bad thing if we in the U.K. do things differently or take a different approach to legislation.”
Most importantly, he said, the deal fulfills the promise of Brexit and frees the U.K. from EU laws and regulations.
“We've taken back control of our laws, and our destiny,” he said. “We've taken back control of every jot and tittle of our regulation in a way that is complete and unfettered.”