DUBLIN (REUTERS) - Irish Prime Minister Leo Varadkar on Friday (Dec 8) hailed a "politically bullet proof" agreement on its border with Northern Ireland as a very significant day for the island and one that pushed all sides towards a less economically damaging
Brexit by Britain.

Dublin said the deal, which should help overall talks move onto trade after a week of intense negotiations, meant there was no way
Brexit could lead to the establishment of a "hard" border with Northern Ireland, which will be the only land frontier between Britain and the EU after Brexit.

Armed with a power of veto, EU member Ireland had insisted negotiations could not move forward unless Britain agreed that customs regulations stay the same on both sides of the Irish border post-Brexit. Dublin has said this is the only way of avoiding a damaging return to border controls.

"The strongest political commitment that exist in this document is the commitment that there will be no hard border ... They are politically bullet proof. They're cast iron," Varadkar told a news conference.

The deal introduced what Varadkar called a "backstop" into the process that means if Britain cannot strike the kind of free trade
deal it wishes, its province of Northern Ireland will have to stay fully aligned with the rules of the EU internal market and customs union that member state Ireland operates under.

However the pro-Brexit Northern Irish party that props up Britain's minority government and whose 11th-hour objections scuppered a
deal on Monday said more work was needed to establish how the arrangements would work given that Britain was committed to leaving both the single market and customs union.

It also raised concerns that the border agreement could pre-judge the debate within the British cabinet over what kind of concessions the country should offer in return for preferential access to the EU's single market.

"We cautioned the Prime Minister about proceeding with this agreement in its present form given the issues which still need to be resolved," Democratic Unionist Party (DUP) leader Arlene Foster said in a statement.

"We will play a full part with the government in the second stage of negotiations on a comprehensive trade deal. Nothing is agreed until everything is agreed and how we vote on the final deal will depend on its contents."

SOFT BREXIT?

The DUP objections led to the inclusion of a clause stating that along with North/South alignment, no new regulatory barriers would develop between Northern Ireland and the rest of Britain, come what may.

Varadkar said Dublin was comfortable with the new language and would have agreed to it had it been in the original text.

Ireland hopes its neighbour will ultimately maintain the closest possible trading relationship with the EU after Brexit given its economy is widely considered the most vulnerable among the bloc's 27 remaining members due to its close trading links.

Britain is one of Ireland's largest trading partners with 65 billion euros (S$103.2 billion) worth of goods and services traded back and forth across the Irish Sea a year.

Deputy Prime Minister Simon Coveney said Friday's agreement"puts a floor" under what is possible in the negotiations on trade and Varadkar also indicated that it could help London move away from a so-called hard Brexit.

"I think things are very much moving in the right direction, Brexit is a British policy, obviously it is in our interests that the Brexit that does happen is as soft as it can be,"Varadkar said when asked if a soft Brexit was now more likely.

"As we get into the detail more and more, the British people will understand why it makes sense that we have very similar or almost identical rules and regulations."

One analyst said the deal appears to force Britain into a corner and could push it towards a close relationship along the line of European Economic Area (EEA) membership.

"It's beginning to look a lot like 'soft-Brexit'," said Dermot O'Leary, chief economist at Ireland's Goodbody Stockbrokers.

Varadkar reiterated that Ireland would be Britain's biggest supporter in those free trade talks.

"I'll be very frank, Brexit by its nature has strained relations between Ireland and Britain, of course it has, how could it not?," he said.

"But because of this agreement we have today, because we have been given the guarantees we sought, I think in the months and years ahead Britain will have no closer friend than Ireland when it comes to future negotiations and the final treaty.