Brexit deal done: UK and EU reach trade agreement at 11th hour

She said the deal meant "EU rules and standards will be respected" with "effective tools to react" if the UK side tries to undercut Brussels to seek a competitive advantage.  

There will be a five-and-a-half year transition period for the fishing industry, she indicated.

And co-operation will continue on issues including climate change, energy and transport.

However, there were concerns that security in the UK could be hit by the deal as it will no longer be in Europol or Eurojust and have access to fewer key databases.

The UK source  insisted that the deal would mean that the UK is “no longer in the lunar pull of the EU, we are not bound by EU rules, there is no role for the European Court of Justice and all of our key red lines about returning sovereignty have been achieved.”

However, the initial statement makes no mention of the economic blow to the UK which most experts believe the severing of the close ties with the EU will have in coming years, or the expected at least short-term disruption in trade.

It also made no mention of concessions made in order to reach the agreement with Brussels, which are likely to anger some Brexiteers, or of new checks down the Irish Sea between Northern Ireland and Britain.

Instead, the sources insisted that the deal “means that we will have full political and economic independence on 1st January 2021.

They added: “We have got Brexit done and we can now take full advantage of the fantastic opportunities available to us as an independent trading nation, striking trade deals with other partners around the world.

“A points-based immigration system will put us in full control of who enters the UK and free movement will end.

Sir Keir Starmer swiftly signalled that he is likely to back the deal.

A Labour Party spokesman said: "Since the election, the Labour Party has urged the Government and the EU to secure a trade deal because that is in the national interest.

"We will be setting out our formal response to the deal in due course."

The EU's chief negotiator Michel Barnier said: "The clock is no longer ticking. After four years of collective effort and EU unity to preserve peace and stability on the island of Ireland, to protect the citizens and the single market, to build a new partnership with the UK."

Mr Barnier thanked those involved in the process, adding: "This process has engaged so many citizens, businesses, stakeholders and, obviously, so many journalists. Thank you for your patience and your attention.

"Today is a day of relief but tinged too by sadness. As we compare what came before with what lies ahead."

But Charles Grant, of the Centre for European Reform, suggested that the Brexit deal had not finalised future arrangements but instead unleashed decades of negotiations between the UK and the EU.

He tweeted: "Most Brits have no idea how hard Brexit will be. 

"Travellers, manufacturers & farmers will suffer irksome friction at borders; service companies will lose access to EU markets; businesses that import EU workers will be hurt. So UK will be less attractive to foreign investors.

"When the Brits realise what a thin deal they've got, their politicians will debate how/whether to improve it. Labour is likely to seek closer economic & security ties. For one reason or another, UK & EU will be in permanent negotiation, for at least 50 years."

The breakthrough came after negotiations dragged on through the night.

It means that when the Brexit transition period ends on 1 January goods can still pass between Britain and its largest trading partner, the EU, without the imposition of widespread tarrifs.

There had been fears that “no deal” would have resulted in further chaos at Channel ports and higher prices in shops in the New Year as retailers passed on new import taxes to consumers.

The talks, between teams led by David Frost for the UK and Michel Barnier for the EU, began in March but have repeatedly hit obstacles that made it look likely ‘no deal’ was the most likely outcome.

The two biggest sticking points have been fishing quotas for European fleets, and the so called “level playing field” on regulations such as workers rights and environmental protection.

An EU document said the deal included:

* Not just trade in goods and services, but also a broad range of other areas, such as invest-ment, competition, State aid, tax transparency, air and road transport, energy and sustainabil-ity, fisheries, data protection, and social security coordination.

* Zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin.

* Both parties committed to ensuring a robust level playing field by maintaining high levels of protection in areas such as environmental protection, the fight against climate change and car-bon pricing, social and labour rights, tax transparency and State aid, with “effective, domestic enforcement, a binding dispute settlement mechanism and the possibility for both parties to take remedial measures”.

* A new framework for the joint management of fish stocks in EU and UK waters, with Britain able “to further develop British fishing activities, while the activities and livelihoods of Europe-an fishing communities will be safeguarded, and natural resources preserved”.

* Continued and sustainable air, road, rail and maritime connectivity, though market access falls below what the Single Market offers.  

* On energy, a new model for trading and interconnectivity, with guarantees for open and fair competition, including on safety standards for offshore, and production of renewable energy.

A Trade and Cooperation Agreement establishes a new framework for law enforcement and judicial cooperation in criminal and civil law matters, Brussels added.

“It recognises the need for strong cooperation between national police and judicial authorities, in particular for fighting and prosecuting cross-border crime and terrorism,” the document stressed.

“It builds new operational capabilities, taking account of the fact that the UK, as a non-EU member outside of the Schengen area, will not have the same facilities as before.”

On governance, the deal aims to give “maximum legal certainty to businesses, consumers and citizens”.

It establishes a Joint Partnership Council to ensure the agreement “is properly applied and in-terpreted”.

The Brussels document adds: “Binding enforcement and dispute settlement mechanisms will ensure that rights of businesses, consumers and individuals are respected. This means that businesses in the EU and the UK compete on a level playing field and will avoid either party us-ing its regulatory autonomy to grant unfair subsidies or distort competition.

Both parties can engage in cross-sector retaliation in case of violations of the agreement. This cross-sector retaliation applies to all areas of the economic partnership.”