JAMES FRANEY reveals the key issues that could yet thwart the latest Brexit agreement

Downing Street today kept close to the new Brexit deal as it entered a crucial phase. The text of the proposed deal was withheld from both Stormont officials and EU ambassadors during briefings in Belfast and Brussels.

However, diplomats said that Rishi Sunak and European Commission President Ursula von der Leyen still had some issues to resolve at their scheduled talks in Munich. There will be several key issues on the table:

Compliance with EU Laws:

Whatever the Prime Minister announces next week, Northern Ireland must continue to comply with EU rules.

Brussels argues that Northern Ireland companies must comply with its regulations because of the high volume of trade with the republic.

Eurocrats say Northern Irish traders will only be able to sell freely into the European single market if EU rules remain in place there. But local politicians have no say in these rules.

Facilitation of goods controls:

Brussels wanted all goods shipped across the Irish Sea to be subject to the same customs controls, arguing the bloc’s internal market could be at risk.

However, the British negotiators managed to get them to give in and accept their blueprint for red and green customs lanes.

Both sides have already reached a data-sharing agreement to give the EU access to customs data, further reducing the need for inspections. Goods from trusted traders bound for Northern Ireland would be admitted through a green lane without routine physical checks, but officers would reserve the right to inspect suspicious cargo.

These goods, to be offered for sale in the Republic of Ireland, would undergo customs formalities in Northern Irish ports.

Unionist politicians say even the latest compromise treats Northern Ireland differently than the rest of the UK.

European Court of Justice:

The role of EU judges in Northern Ireland has been the most difficult dispute to resolve, as Eurocrats insist the European Court of Justice (ECJ) must have the final say on disagreements about EU law. Sources in Brussels say that will be the case with any revised agreement, but they expect a pact to be struck that names the Luxembourg-based body as the final authority.

Britain had previously argued in the negotiations that any disagreement should first be referred to an independent tribunal. It would have prevented the European Commission from referring the government directly to the ECJ.

Now the EU executive is likely to sign a ‘gentleman’s agreement’ promising not to take cases to court without first having informal talks with the UK. This is unlikely to be accepted by critics of the protocol, who say ending the influence of foreign judges across the UK was one of the main drivers behind Brexit.

Taxes and state aid:

The UK has called for an end to the EU state aid and VAT rules imposed under the Protocol on Northern Irish companies, which prevent them from receiving state subsidies and UK tax breaks.

The current agreement states that all subsidies above a certain amount affecting trade between NI and the EU must be approved by the Eurocrats in Brussels.

However, a UK government spokesman declined to say last night whether that was still the UK’s negotiating position, stoking fears the government had watered down its demands.