Home UK U.K., EU Agree on Draft Brexit Deal, Paving Way for Key Vote

U.K., EU Agree on Draft Brexit Deal, Paving Way for Key Vote

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BRUSSELS—U.K. Prime Minister

Boris Johnson’s

government and the European Union agreed to new terms for the country’s exit from the bloc Thursday, paving the way for a high-stakes vote in the British Parliament.

The accord was endorsed by the leaders of the other 27 EU countries at a summit here. Mr. Johnson now faces the formidable challenge of winning backing for the deal from Parliament. In a setback for the deal’s prospects, a political party allied with his government said it wouldn’t support the deal.

Following days of intense talks more than three years after Britain voted to leave the EU, the two sides struck a compromise intended to ensure a border doesn’t appear on the island of Ireland. It was the main sticking point in negotiations aimed at smoothing Britain’s split with its largest trading partner.

The breakthrough marks an unexpected turn of events in Britain’s tortured journey out of the EU and a victory for Mr. Johnson, who has pledged to deliver on the result of the 2016 referendum. It comes after weeks of at times acrimonious confrontations between U.K. and EU officials over the terms of Brexit, scheduled for Oct. 31.

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The proposed deal would leave Britain freer to set its own rules and strike trade deals independently from the EU, a key demand of Brexit supporters.

The focus now shifts to Britain’s Parliament, where Mr. Johnson’s aides are busy selling the deal to both his Conservative Party and opposition Labour lawmakers before a vote scheduled for Saturday. Mr. Johnson urged lawmakers to vote through the deal “so that we can get Brexit done without any further delay.” A previous deal negotiated by Mr. Johnson’s predecessor,

Theresa May,

was rejected by Parliament three times.

The U.K.’s border with Ireland has been a major sticking point since Britain started negotiating its exit from the European Union. WSJ’s Jason Douglas traveled to the country’s only land frontier to understand why the issue is so divisive. Video: George Downs; Illustration: Jaden Urbi/Soarscape

But Mr. Johnson’s allies in Northern Ireland’s Democratic Unionist Party said they wouldn’t support the deal when it comes before Parliament for a vote, arguing that the agreement would weaken the bonds between Northern Ireland and the rest of the U.K.

That presents a significant challenge for Mr. Johnson’s minority government to persuade a cluster of euroskeptic lawmakers in his own Conservative Party to vote for his deal, some of whom said they would take their lead from the DUP. Both groups voted against Mrs. May’s deal.

Mr. Johnson’s pitch: This is a chance to put the highly divisive Brexit issue to bed and move on. Without the DUP’s support, the key will be Mr. Johnson’s ability to woo some 20 opposition Labour lawmakers whose districts voted for Brexit. If enough of them cross the aisle, the deal has a chance of passing; if they hold firm, it will likely fail.

Mr. Johnson was expected to set about selling the deal to lawmakers as soon as he returns home from Brussels.

Mr. Johnson has an advantage over Mrs. May in that unlike her, he backed Brexit in 2016. This buys him credibility with euroskeptics in his party. Several lawmakers who endorsed his candidacy to become prime minister said they did so because they believed he would be able to deliver Brexit after years of talks.

Since coming to power this summer, Mr. Johnson has spoken of the need to create a pressure-cooker atmosphere in the House of Commons, confronting lawmakers with a choice between a Brexit deal or an abrupt split from the trade bloc.

That plan was undercut when rebel and opposition lawmakers passed a law, against Mr. Johnson’s wishes, stating that if a deal isn’t passed by Saturday night the government must ask the EU for an extension to talks beyond the current Oct. 31 deadline. Brexit has already been delayed twice from the original March 29 date.

Deal or No Deal?

Here’s a cheat-sheet of the most likely paths that Brexit could take.

Parliament

votes on deal reached in Brussels

Govt. asks for extension until Jan. 31, 2020

Govt. refuses to ask for extension

Parliament ousts Johnson or he resigns.*

Govt. asks for extension until Jan. 31, 2020

Opposition lawmakers worry the threat of an abrupt split with the EU hasn’t gone away entirely. If the deal is voted down on Saturday, they are expected to make sure the government requests an extension.

There would in that case be only two ways to clear the Brexit logjam: another election or a second referendum on the departure terms. Mr. Johnson opposes another referendum but favors a general election and is currently leading in the polls.

Prime Minister

Leo Varadkar

of Ireland said last week the EU would consider an extension if Parliament voted the deal down and the British government requested one.

If a deal passes in the next week, European officials said they would work hard to ensure Britain could leave Oct. 31, with the translation of the deal into all EU languages expected by Monday. European Parliament President

David Sassoli

said EU lawmakers, who must ratify the pact, would “play our part.”

European Commission President

Jean-Claude Juncker

said there was “no need for any kind of prolongation” to talks after Thursday’s agreement.

Just more than a week ago, British officials said the talks would likely fold over what they called EU intransigence. A top EU official publicly scolded Mr. Johnson for playing a “stupid blame game.”

Negotiations intensified after a meeting between Messrs. Johnson and Varadkar at a wedding venue in northern England, as Britain edged closer to European demands for regulatory and customs checks between the British mainland and Northern Ireland in the Irish Sea.

The withdrawal agreement, the basis of which was hashed out late last year, spells out a financial settlement, a guarantee of citizens’ rights and a plan to avoid a physical border on the island of Ireland. It is accompanied by a nonbinding political declaration that is supposed to set out the shape of future relations.

If a deal is ratified, then Britain will enter a transition period of at least 14 months, in which relations with the EU are maintained as they are now. Work would immediately begin on the next stage of Brexit: a future trade deal between the U.K. and EU.

The Irish border issue has, since the start of talks, proved particularly complicated. Northern Ireland is part of the U.K., while neighboring Ireland is and will remain part of the EU. Officials on both sides feared building border infrastructure to conduct customs and other regulatory checks could exacerbate historic sectarian tensions on the island.

When Mr. Johnson was named prime minister in the summer, he pledged to do away with an unpopular clause in the divorce agreement negotiated by Mrs. May that would have kept the whole of the U.K. indefinitely as part of the EU’s customs union to avoid a physical border. EU leaders said the withdrawal agreement wasn’t open to renegotiation, but later agreed to reopen it.

Under the new agreement, Northern Ireland would remain legally in the U.K.’s customs territory. But in practical terms, most goods traveling into Northern Ireland from the rest of the U.K. or elsewhere would undergo EU customs checks before entering the territory, and Northern Irish companies or retailers would then claim rebates where U.K. tariffs fall below EU levels.

Head to Head

How Boris Johnson’s Brexit agreement differs from Theresa May’s.

Existing U.K.-EU relations continue through transition*

U.K. in EU customs union until the two sides agree on arrangements to ensure a seemless border in Ireland.

N. Ireland out of EU customs union, however customs checks will be done on most trade between the mainland and N. Ireland.

Goods and

food regulation

N. Ireland follows EU regulation; regulatory checks between Great Britain and N. Ireland.

N. Ireland is effectively inside EU regime but system will be implemented by U.K. authorities.

N. Ireland inside EU VAT regime.

N. Ireland legislature decides if it wants to extend at least every four years.

Existing U.K.-EU relations continue through transition*

U.K. in EU customs union until the two sides agree on arrangements to ensure a seemless border in Ireland.

N. Ireland out of EU customs union, however customs checks will be done on most trade between the mainland and N. Ireland.

Goods and

food regulation

N. Ireland follows EU regulation; regulatory checks between Great Britain and N. Ireland.

N. Ireland is effectively inside EU regime but system will be implemented by U.K. authorities.

N. Ireland inside EU VAT regime.

N. Ireland legislature decides if it wants to extend at least every four years.

Existing U.K.-EU relations continue through transition*

U.K. in EU customs union until the two sides agree on arrangements to ensure a seemless border in Ireland.

N. Ireland out of EU customs union, however customs checks will be done on most trade between the mainland and N. Ireland.

Goods and

food regulation

N. Ireland follows EU regulation; regulatory checks between Great Britain and N. Ireland.

N. Ireland is effectively inside EU regime but system will be implemented by U.K. authorities.

N. Ireland inside EU VAT regime.

N. Ireland legislature decides if it wants to extend at least every four years.

How Boris Johnson’s Brexit agreement differs from Theresa May’s.

Existing U.K.-EU relations continue through transition*

N. Ireland out of EU customs union, however customs checks will be done on most trade between the mainland and N. Ireland.

U.K. in EU customs union until the two sides agree on arrangements to ensure a seemless border in Ireland.

Goods and

food regulation

N. Ireland follows EU regulation; regulatory checks between Great Britain and N. Ireland.

N. Ireland is effectively inside EU regime but system will be implemented by U.K. authorities.

N. Ireland inside EU VAT regime.

N. Ireland legislature decides if it wants to extend at least every four years.

However, there would be exemptions from customs checks on goods at no risk of entering the EU’s single market—products that would be jointly defined by both sides.

Northern Ireland’s Parliament would get a vote four years into the special arrangements on whether to continue with them. That would be decided by a simple majority, meaning the DUP alone couldn’t veto it. If the assembly votes to end the arrangements, there would be a two-year phaseout period.

Northern Ireland would be subject to most EU rules on value-added tax, which aim to prevent large-scale VAT fraud. However, the system will be administered and implemented by U.K. authorities, who will also decide on exemptions or lower rates for some goods. The EU would monitor the system and have powers to ensure it doesn’t put EU firms at a competitive disadvantage.

Mr. Johnson had pushed for changes to the wording in the political declaration to drop a promise to maintain “robust” labor, environmental, social and tax standards to secure a trade agreement with the EU. In the end, he backed down and the EU reiterated its ambition to reach a zero-tariff trade deal. The political declaration isn’t legally binding.

In its statement, the DUP criticized the agreement’s provisions on customs and tax in Northern Ireland, and the mechanism it sets out for securing the consent of Northern Ireland’s legislature to maintaining the new regime. It also said the agreement would push up costs for Northern Irish consumers and hurt the region’s businesses.

Write to Laurence Norman at laurence.norman@wsj.com and Max Colchester at max.colchester@wsj.com

Corrections & Amplifications
Irish Finance Minister Paschal Donohoe’s last name was incorrectly spelled Donohue in an earlier version of this article. (Oct. 17, 2019)

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