LONDON, 25 December, 2020, (TON): A historic deal on the UK’s future trading and security relationship with the European Union has been struck on Christmas Eve, a week before the end of the Brexit transition period. It is also the first modern trade deal to disintegrate a trading partnership, erecting and defining barriers between markets.

After nine months of fractious negotiations, the UK and the EU have reached agreement on an economic partnership agreement that will govern large swaths of bilateral trade worth more than £650bn.

The UK is set to exit EU trading rules next Thursday - a year after officially leaving the 27 nation bloc. It will mean big changes for business, with the UK and EU forming two separate markets, and the end of free movement.

New arrangements allowing for tariff-free trade in goods and close police and judicial cooperation will come into force, as the country leaves the single market and customs union on 31 December.

The deal was announced by Boris Johnson on twitter. In a press conference in Brussels, European Commission President, Ursula von der Leyen said: "This was a long and winding road but we have got a good deal to show for it."

She said the deal was "fair" and "balanced" and it was now "time to turn the page and look to the future". The UK "remains a trusted partner," she added.

At his press conference, Boris Johnson said the £668bn a year agreement would "protect jobs across this country" and "enable UK goods to be sold without tariffs, without quotas in the EU market".

He acknowledged he had been forced to give ground on his demands on fishing.

"The EU began with I think wanting a transition period of 14 years, we wanted three years, we've ended up at five years," he said.

And he said the UK had not got all it wanted on financial services, a vital part of the UK economy, but he insisted the deal was "nonetheless going to enable our dynamic City of London to get on and prosper as never before".

The agreement covers goods and services trade, but also includes investment chapters, provisions on fish and data protection. The EU and the U.K. have agreed on a transition period until June 2026 to switch from the current quota shares in U.K. waters to new quota shares.

The trade deal will come as a major relief to many British businesses, already reeling from the impact of coronavirus, who feared disruption at the borders and the imposition of tariffs, or taxes on imports.

The deal will be examined by EU ambassadors in Brussels. For the deal to enter into force provisionally, it will have to be approved by the bloc's member governments via the Council of the EU by December 31. The European Parliament is expected to vote on the agreement retrospectively early next year.

Meanwhile, the U.K.'s House of Lords and House of Commons have both been recalled for December 30 and are expected to vote on the deal.