The new deal is called the Windsor Framework and reduces red tape and customs checks for goods from Great Britain that are intended to stay in Northern Ireland
Brussels and London on Monday said they were beginning "a new chapter" in their relationship after striking a deal on the contentious Northern Ireland Protocol.
The new agreement, called the Windsor Framework, was announced by European Commission chief Ursula von der Leyen and British Prime Minister Rishi Sunak after a meeting in the south-eastern English city.
"The United Kingdom and European Union may have had our differences in the past, but we are allies, trading partners and friends, something that we've seen clearly in the past year as we joined with others to support Ukraine. This is the beginning of a new chapter in our relationship," Sunak said during a joint press conference.
Von der Leyen meanwhile said that "the new Windsor Framework respects and protects our respective markets and our respective legitimate interests, and most importantly, it protects the very hard-earned peace gains of the Belfast/Good Friday Agreement for the people of Northern Ireland and across the island of Ireland."
The von der Leyen-Sunak meeting was the second one in less than two weeks with the first held on the sidelines of the Munich Security Conference.
It also comes after a flurry of cross-Channel talks over the past few weeks between Maroš Šefčovič, the EU's main Brexit negotiator, and his British interlocutor, Foreign Secretary James Cleverly. Sunak has meanwhile also travelled to Northern Ireland to gather support for the deal.
ECJ 'sole and ultimate arbiter of EU law'
The new deal is based on three strands, including the creation of so-called green and red lanes for the export of goods from Great Britain to Northern Ireland. Goods intended to stay in the province will go through the green lane where "burdensome customs bureaucracy will be scrapped," Sunak said.
Under the Protocol, Northern Ireland has remained within the EU's Customs Union for goods meaning checks must be carried out between the two sides of the UK.
This de-facto border in the Irish Sea was seen as the best way to prevent the erection of a border between Northern Ireland and the Republic of Ireland, with some fearing a return of deadly sectarian violence that was ended 25 years ago with the Good Friday Agreement.
The new lanes were made possible by a data-sharing deal struck in early January allowing the EU real-time access to the UK's IP systems for trade data.
"This means that if food is available on supermarket shelves in Great Britain, then it will be available on supermarket shelves in Northern Ireland," Sunak said. "This means we have removed any sense of a border in the Irish Sea."
Second, the legal text of the Protocol has been amended so that any future VAT and excise changes made in the UK also apply to Northern Ireland. Additionally, drugs approved by UK regulators will automatically be available in Northern Ireland.
Third, the agreement introduces a "Stormont Brake" to give the province more sovereignty over its laws. It enables the Assembly to reject new EU laws for goods that may be introduced if they believe it would have a significant and lasting effect on the people and businesses of Northern Ireland.
This new mechanism, VDL said, should reduce British concerns about the role of the European Court of Justice for dispute resolution as should the EU contest the triggering of the Brake, the matter will be referred to an independent arbitration panel. She nonetheless stressed that the ECJ remains "the sole and ultimate arbiter of EU law" and that it "will have the final say on EU law and single market issues."
'We'll take our time to consider the detail'
The Windsor Agreement will now need to be backed by lawmakers on both sides of the Channel.
Asked if he's worried that the Euroskeptic wing of the ruling Conservative party or Northern Ireland's Democratic Unionist Party (DUP) can scupper the deal, Sunak said that the agreement "addresses" their concerns.
"I believe that what we have achieved today is a real breakthrough and it's now for the parties to consider that and decide themselves how to take it forward and build a better future for people in Northern Ireland," he added.
The region has been without an executive since the DUP pulled out of the power-sharing agreement over the Protocol in February 2022 arguing the treaty undermines its place in the UK.
The DUP has issued a list of "tests" it says must be fulfilled for it to support any deal. These include “no checks on goods going from Northern Ireland to Great Britain or from Great Britain to Northern Ireland" and "no new regulatory barriers develop between Northern Ireland and the rest of the United Kingdom."
DUP leader Jeffrey Donaldson said on Twitter that they "take our time to consider the detail and measure a deal against our seven tests."
Michelle O'Neill, Vice President of the republican Sinn Fein party, meanwhile described the deal as a "breakthrough".
"We are at a critical turning point. The economic possibilities this opens up must now be seized. The onus is on the DUP to end its boycott & now join the rest of us to make politics work," she said.
'Worth every effort'
On the EU side, ambassadors from the 27 member states were briefed in Brussels on Monday afternoon on the content of the deal.
Šefčovič said the deal was "worth every effort".
The Irish government has already welcomed the announcement, with Foreign Affairs Minister Micheál Martin saying in a statement that it is "a genuine response to their (unionists) concerns".
"I appreciate that some time may be needed to consider the detail of the deal, but I would urge political leaders in Northern Ireland to act quickly, to put in place institutions that can respond directly to the needs of the people of Northern Ireland," he wrote. "I share the hope that today's announcement allows the EU and the UK to open a new chapter in their relationship."
Prime Minister Alexander De Croo said "Belgium is very satisfied with the agreement regarding the implementation of the Northern Ireland protocol."
"This is great news for our EU-UK relationship. Close ties between Europe and the UK are critical in these turbulent times," he also said.
For Irish MEP Seán Kelly (EPP), First Vice-Chair of the EU-UK Parliamentary Assembly, the announcement "is welcome and offers hope to people and businesses" in Northern Ireland.
But he also warned that a "political test remains" to ensure the deal is implemented on the ground as it will need to be approved by British lawmakers.
"There are some hard truths to be faced at this point and we will need to see strong and responsible political leadership within the Conservative Party and the DUP. That's why this moment is a real leadership test for Prime Minister Sunak. The Prime Minister must create a coalition of the logical, who are capable of looking beyond the immediate term, to communicate the fact-based realities of the situation," Kelly said.