The EU and the UK on Wednesday struck a political agreement to ensure the continued circulation of people and goods between Spain and Gibraltar without any physical barriers.
European Commissioner Maroš Šefčovič called it a "truly historic milestone for the EU, including Spain, as well as for the UK and Gibraltar".
He said it came after a "successful meeting" with Spanish Minister for Foreign Affairs José Manuel Albares, British Foreign Secretary David Lammy, and Chief Minister of Gibraltar Fabian Picardo.
Lammy described the deal on X as a "practical solution which safeguards sovereignty, jobs and growth".
"We have ensured Gibraltar’s interests - as part of the UK family - are at the heart of this agreement," he added.
The UK and Spain have been trying to reach a deal for years to ensure that people and goods could cross freely over the British overseas territory's land border with Spain. But one of the remaining sticking points was how the territory’s border would be controlled.
All sides were eager to find a deal before the EU's new entry/exit system comes into force, which is now slated for October this year. Gibraltar, which is a British Overseas Territory, was ceded to the UK in 1713, but Spain has claimed the territory as its own.
"This agreement marks a before and after for stability, cooperation and well-being, creating an area of shared prosperity between Gibraltar and Campo de Gibraltar, as has been our goal all this time," Albares, who spoke alongside Šefčovič from Brussels, told reporters.
"With this agreement, the fence, the last wall of continental Europe, will disappear and the free movement of people and goods is guaranteed," he added.
The deal will preserve the Schengen area, the EU Single Market and Customs Union but remove all physical barriers, checks and controls on persons and goods at the crossing points between Spain and Gibraltar. Checks will however be carried out at Gibraltar's port and airport.
On goods, the parties agreed on the principles underpinning the future customs unions between the EU and Gibraltar, as well as an agreement on the principles of indirect taxation to be applied in Gibraltar, including on tobacco.
"The legal certainty, the legal clarity will clearly improve the business environment for the whole region," Šefčovič said.
Spain and the UK also agreed a new cooperation framework for the exchange of information, a mandatory consultation mechanism and the creation of a financial mechanism to promote economic and social development, employment and cohesion between the two sides.
The full legal text still needs to be finalised by negotiating teams and will then be submitted to the various internal procedures required by the various parties before being ratified.
Šefčovič said he is "absolutely convinced" the deal will be ratified because the parties "really went through every single aspect, every little detail".
"I believe we found the best possible response for every challenge put on the table over the last couple of years," he also said.
Maia de la Baume also contributed to the reporting.
