The UK and EU finally strike a Brexit trade deal

• The UK and the European Union have finally struck a Brexit trade deal.
• The agreement was reached Thursday, less than a week before the UK is due to leave the EU's trade rules.
• Negotiators struck a last-minute deal on several thorny issues to avoid the worst-case scenario: a no-deal outcome.
• The two sides are now racing to put the free-trade deal into law before the new year.
• The deal will allow tariff-free trade to continue between the UK and the EU, but Brits can eventually expect widespread barriers to trade and travel with the European continent.

The UK and the European Union have struck a free-trade deal after nearly a year of talks.

With less than a week before the end of the Brexit transition period, UK and EU officials confirmed on Thursday that they had agreed on a deal after weeks of intensive talks in London and Brussels.

Under the terms of the agreement, there will be zero tariffs and zero quotas on goods, and both sides will cooperate on key issues including security, travel, and climate change.

UK Prime Minister Boris Johnson spoke on the phone with European Commission President Ursula von der Leyen on Thursday afternoon to sign off on the agreement after a day of intensive talks about fishing quotas.

"Everything that the British public was promised during the 2016 referendum and in the general election last year is delivered by this deal," a Downing Street official said in a statement on Thursday.

Johnson tweeted, "The deal is done." At a press conference, he said the UK had "taken back control of our laws and our destiny" and described the agreement as a "good deal for the whole of Europe."

Von der Leyen tweeted: "It was worth fighting for this deal. We now have a fair & balanced agreement with the UK. It will protect our EU interests, ensure fair competition & provide predictability for our fishing communities. Europe is now moving on."

The end of Brexit uncertainty is a victory for Johnson

The deal ends four years of uncertainty and delays that economists believe have already marginally suppressed the British economy's growth rate.

It could save the UK from an even worse fate with no deal. KPMG forecast GDP growth of 4.4% in 2021 without a deal but as much as 10.1% if the trading arrangements remained largely the same.

Britain got an ugly taste of "no deal" earlier this week when France closed its border with the UK to prevent the spread of an aggressive new coronavirus variant that appears to have originated in Kent. Thousands of trucks were stuck alongside the roads of Dover. France has since reopened its border, and the enormous jam is slowly clearing.

The deal also hands Johnson, who came to power on a promise of "get Brexit done," a significant political victory. The Conservative Party is likely to revel in the achievement.

But with Brexit off the table, the coming year will probably refocus on Johnson's handling of the economy and the coronavirus crisis. The OECD said this summer that the UK was hit worse than most major economies during the pandemic.

Now, the details

The UK and the EU are now racing to put the deal into law before the new year.

The UK Parliament is likely to be recalled next week for a vote on the deal, which is expected to pass comfortably given Johnson's 80-seat majority in the Commons. EU leaders and the European Parliament would also need to approve the deal before December 31.

The UK negotiating team, led by David Frost, and its EU counterpart, led by Michel Barnier, had spent months wrangling over a handful of thorny issues including fishing rights, rules to prevent unfair competition (known as the "level playing field"), and how the UK-EU trading relationship would be governed after Brexit.

A no-deal outcome would have resulted in costly tariffs on a range of goods sold between the UK and the EU, leading to price increases in UK shops and making it harder for businesses to export their products to Europe.

But even with a free-trade deal agreed, there could still be disruption in January because of an array of new checks at Britain's border with its biggest trading partner.

Britain is probably unprepared for the new terms of trade

Johnson's government has acknowledged that thousands of UK businesses, particularly smaller ones, have been too busy dealing with the impact of the coronavirus pandemic to make necessary preparations for Brexit.

UK officials are bracing for more long queues of lorries heading for Dover and other ports early next year.

The negotiations nearly collapsed at the end of the summer when Johnson tabled legislation designed to unpick parts of the Brexit Withdrawal Agreement covering Northern Ireland. His government acknowledged that going ahead with the plan would break international law, prompting fury in Brussels and attracting criticism at home.

Johnson's government agreed to remove the controversial clauses after UK and EU officials reached an agreement on implementing the post-Brexit protocol for Northern Ireland.

What will the trade deal mean for the UK?

Tariff-free trade will continue

A tariff-free deal will be a relief to many UK and EU businesses.

In a no-deal outcome, businesses in Britain and Europe would have been required to pay an additional tax on a wide range of imported goods. That would make trading more expensive and lead companies to increase the prices of everyday items.

There will be many new border checks

There will be a host of new checks on goods crossing the border because of the UK's decision to leave the EU's single market and customs union.

Starting January 1, British businesses that export to Europe will have to submit customs declarations and other paperwork in order to get their goods across the border. UK officials have estimated there will be over 400 million additional customs checks a year on goods going to and from the EU.

There'll also be costly processes for exporters of food, plant, and animal goods to the EU because of the bloc's strict health and safety rules.

This mountain of new red tape is why Johnson's government is bracing for delays at the border early next year.

Michael Gove, the chancellor of the Duchy of Lancaster, said last month that "inevitably" there would be a rise in traffic on Britain's motorways in January as businesses adapt to these major new rules and regulations.

The UK government has said there could be queues of up to 7,000 HGVs in a reasonable worst-case scenario.

It is for these reasons that departing the EU with a trade deal is still set to leave the UK significantly worse off. The Office for Budget Responsibility's latest forecast indicates the country's long-term economic output could be reduced by 4 percentage points.

Britain will gain more control of its fishing waters

This issue was reportedly the main sticking point in talks for the past few days.

Johnson had initially demanded that British fishes gain a much bigger share of fish caught in British waters than they do.

But the UK appears to have made significant concessions to get a deal over the line. Johnson said in a press conference on Thursday that the UK would be able to catch two-thirds of fish in UK waters in 5 1/2 years compared with one-half currently. But the BBC reported that the UK had sought a sharp reduction in the value of fish caught by EU boats in UK waters.

While fishing threatened to derail talks on several occasions, the industry's contribution to the UK economy is fairly negligible. It has been a totemic issue in the Brexit debate since the 2016 referendum campaign largely because it is associated with sovereignty and control.

Traveling to the EU from the UK will become harder

The UK's decision to leave the European single market affects the movement of people as well as goods. This will still be the case despite Britain and the EU striking a free-trade agreement.

People making trips to the EU lasting 90 days or more will need to secure a visa, and Brits heading for the continent for any length of time will be required to have their passports stamped when they leave and reenter the UK.

Those driving to the EU will need to obtain a green card and a GB sticker, and in some EU countries they will need an international driving permit.

Travelers will also need to arrange health insurance to replace the European Health Insurance Card, which will no longer be valid for most British people from next year.

Changes will affect pets too. People planning to take dogs, cats, or ferrets with them to the EU will need to get their pets vaccinated at least three weeks before traveling. They'll also need to secure animal health certificates at least 10 days before departing, as the EU's pet passports will no longer apply to British travelers.