BRUSSELS (AP) – Negotiators from the European Union and Britain worked through the night until Christmas Eve to finalize a trade deal that should prevent a chaotic economic split between the two sides next week.
Regardless, trade will change on January 1, when the UK leaves the bloc’s internal market and customs union. But both sides have worked furiously to avoid a nightmare scenario where imposing tariffs and duties would cost billions in trade and hundreds of thousands of jobs, and potentially so snarling ports that many goods would have difficulty getting through. That possibility was clearly illustrated this week when a brief French blockade of British trucks over concerns about the coronavirus caused chaos in ports that is still being resolved.
After nearly all remaining bottlenecks were resolved, negotiators on Thursday scoured hundreds of pages of legal text that should become the blueprint for a post-Brexit relationship.
As during much of the nine-month negotiations, the issue of EU fishing fleets in UK waters proved to be the most persistent and divisive, with negotiators still negotiating quotas for some individual species as the day dawned and went. .
Still, sources on both sides said the long and difficult negotiations were on the verge of closing as negotiators, hiding at EU headquarters in Brussels with a pile of pizzas, worked to deliver the text to their leaders on Thursday.
Irish Foreign Secretary Simon Coveney said there seemed to be “some kind of last-minute hiccup” about the fish, but that was not surprising. He said he expected deal announcements from London and Brussels “later in the day”.
The deal would then go to the 27 EU countries, seeking unanimous approval, as well as the blessing of the EU and the UK parliaments. It is expected to receive those approvals.
The UK currency, the pound, rose 0.5% higher than the dollar to just under $ 1.36 based on deal expectation.
It has been 4 1/2 years since the British voted 52% -48% to leave the EU to – in the words of the Brexiteers’ campaign slogan – “take back control” of Britain’s borders and laws.
It took more than three years of arguing before Britain left the bloc’s political structures on January 31. Negotiations to untangle closely intertwined economies as part of the internal market for EU goods and services took even longer.
Despite the apparent breakthrough, key aspects of the future relationship between the 27-country bloc and its former member remain uncertain. But it leaves the mutually dependent, often troublesome relationship between the UK and the EU – and the 675 billion pounds ($ 918 billion) in annual trade – on a much firmer basis than a disruptive no-deal split.
If a deal is announced, British Prime Minister Boris Johnson could claim to have delivered on the promise that earned him a resounding election victory a year ago: “Get Brexit Done.”
Even with an agreement, trade between Britain and the EU will face customs controls and other barriers on January 1. But an agreement would avert the more disastrous consequences of tariffs and duties. Britain withdrew from the EU on January 31 and an economic transition period ends on December 31.
Johnson has always insisted that the UK will “thrive” even if no agreement is reached and the UK has to trade with the EU under the terms of the World Trade Organization from January 1.
But his administration has recognized that a chaotic exit is likely to lead to deadlock in UK ports, temporary shortages of certain goods and increases in basic food prices. Tariffs will be applied to many UK exports, including 10% on cars and over 40% on lamb, hitting the UK economy as it struggles to recover from the impact of the coronavirus pandemic.
In recent days, Johnson and EU Commission Chair Ursula von der Leyen have been increasingly involved in the talks, speaking over the phone in an effort to unblock negotiations that have taken months, hampered by the pandemic and by both sides. ‘opposing views on what Brexit means.
Rumors of a pre-Christmas trade deal have surfaced in recent days based on progress on the main unresolved issues: fair competition, future dispute resolution and fishing.
The EU has long feared that Britain would undermine the bloc’s social, environmental and state aid rules in order to take an unfair advantage of its exports to the EU. Britain has said complying with EU rules would undermine its sovereignty.
Finally, a compromise was reached on those “level playing field”, making the economically small but hugely symbolic issue of fish the final sticking point. Maritime EU countries are trying to maintain access to British waters where they have been fishing for a long time, but Britain has insisted that it should exercise control as an “independent coastal state”.
A huge gap between the two sides in the fishing was gradually narrowed until it finally seemed bridgeable.
Johnson’s large conservative majority in parliament should get the Brexit trade deal passed, but any compromise will be criticized by hardline Brexit supporters in his party. The party’s Euroskeptic European Research Group said it would carefully scrutinize each deal “to ensure that its provisions truly protect the UK’s sovereignty after we leave the transition period at the end of this year.”
The European Parliament has warned that it is now too late to approve the deal before January 1, but an agreement could be tentatively struck and approved by EU lawmakers in January.
Companies on both sides are clamoring for a deal that would save tens of billions of dollars.
While both sides would suffer economically from the lack of a trade deal, most economists think Britain would take a bigger hit because it is smaller and more dependent on trade with the EU than the other way around.
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Lawless reported from London.
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