Britain and EU strike Brexit deal; to start trade talks

British Prime Minister Theresa May got a big reprieve on Friday after Britain and the European Union managed to set the divorce proceedings moving after the two sides reached a deal that paves way for talks on trade, boosting hopes of an early Brexit.

The joint report prepared by Britain and the EU makes it clear that Ireland will be an important factor in Brexit.

Both sides will keep an open border between Northern Ireland and the Republic, and that there will be "no new regulatory barriers" between Northern Ireland and the rest of the UK.

While the report commits to the UK leaving the EU's single market and customs union, it also commits to close trade relation between the two.

But, that would necessitate comprehensive free trade deal and closely mirroring customs arrangements.

If Britain become a "third country" like any other non-EU countries outside the single market , then border controls will be necessary.

That equates for many with a "soft Brexit" and is the trajectory many economists argue would be best for the UK economy.

Under the terms of agreement reached today, the UK will protect the rights of EU citizens living in the country as per the UK law and enforced by British courts while UK citizens living in the EU countries will have their rights protected by EU courts.

The European Court of Justice will have jurisdiction over EU citizens' rights for eight years after the withdrawal day. EU citizens in the UK will have equal access to social security, health care, education and employment.

But both EU citizens in the UK and UK citizens in the EU would lose their rights to residency if they are out of the country for five or more years.

''Sufficient progress'' has been made after London, Dublin and Belfast worked through the night to break an impasse over the status of the Irish border that had scuppered an attempt to clinch a deal on Monday. The European Commission said

PM May, speaking in Brussels, said the deal opened the way for talks that would bring certainty to Britain's future after quitting the EU.

European Council President Donald Tusk, however, cautioned that while breaking up was hard, building a new relationship would be even harder.

''So much time has been devoted to the easier part of the task,'' Tusk said. ''And now, to negotiate a transition arrangement and the framework for our future relationship, we have de facto less than a year.''

Analyst, meanwhile, said the deal would result in closer UK-EU relations than most Brexit watchers feared. In fact, they point out, trade will keep flowing between the world's biggest trading bloc and the world's sixth-largest economy.

Meanwhile, the process for giving EU citizens residency rights in the UK will be under a new procedure, referred to as "settled status".

The document has sought to make assurance that the administrative process "will be transparent, smooth and streamlined". The cost of the process, however, is unclear, with some reports stating it will be "free of charge" or "for a charge not exceeding that imposed on nationals for the issuing of similar".

May announced the deal alongside EU Commission president Jean-Claude Juncker at a news conference just after 0730 local time.

Sterling climbed to a six-month high against the euro Euro, with one euro worth 86.9 pence. Against the US dollar the pound hovered near a four-day high against a backdrop of broader dollar strength.