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Whatever happens, Britain will abandon the single market and the EU customs union, leading to the reintroduction of border controls for the first time in decades.
FILE: British Prime Minister Boris Johnson. Image: AFP
LONDON – A Brexit trade deal between the UK and the European Union appeared to be in play on Friday, after leaders on both sides of the English Channel made a grim assessment of progress in last-minute talks.
Prime Minister Boris Johnson and the head of the European Commission, Ursula von der Leyen, have given their negotiators until Sunday before a decision is made on whether to keep talking or give up.
The mood worsened after von der Leyen told EU leaders at a Brussels marathon summit that there were “low expectations” and that “the probability of a no-deal is greater than an agreement.”
Ireland and Germany tried to lift spirits, agreeing that a deal was “difficult but still possible.”
But Johnson said it seemed “very, very likely” that Britain would end up negotiating with its biggest trading partner on the terms of the World Trade Organization (WTO) starting in the New Year.
“If there is a big offer, a big change in what they (the EU) are saying, then I have to say that I haven’t seen it yet,” he told reporters in Blyth, northeast England.
The comments did nothing to inspire confidence in the British pound, which extended its losses in the currency markets, falling more than one percent against the dollar.
“Traders are turning their backs on the pound because the language used now is more serious and fears of a no-deal have risen considerably,” CMC Markets analyst David Madden told AFP.
UK chief negotiator David Frost and his EU counterpart Michel Barnier are trying to reach a deal on Sunday, with just three weeks left in a transition period following Britain’s departure from the bloc. in january.
LAST MINUTE REPAIR?
Whatever happens, Britain will abandon the single market and the EU customs union, prompting the reintroduction of border controls for the first time in decades.
That has already raised the possibility of heavy traffic clogging roads leading to seaports in the south and southeast of England, as bureaucracy lengthens wait times for imports and exports.
Traffic jams at the Felixstowe container port in eastern England and elsewhere have already raised fears that there is more to come and delays in deliveries to shops, businesses and industry.
But Johnson’s spokesman said they were primarily caused by a “global surge” in demand for consumer goods and the effect of the coronavirus outbreak on shipping patterns and container capacity.
Trade talks on Brexit have stalled over the extent of the EU’s access to British fishing grounds and the rules governing fair competition.
An EU official refused to rule out a last-minute “change of course” for a deal, even after the bloc published a “no-deal” contingency plan in what was seen as a warning to Britain.
Johnson said again that fisheries and the so-called level playing field were key issues, in particular a “ratchet clause” that would force Britain to equalize any future EU legislation.
Von der Leyen told a post-summit press conference that the proposed “equivalence” rules would not be binding and that Britain could act as it sees fit.
“We would simply adapt the conditions of access to our market accordingly,” he added. Johnson’s spokesman said that would leave Britain tied to decisions made in Brussels.
‘AUSTRALIA TERMS’
Johnson won a snap election a year ago on Saturday on the promise of a “oven-ready” Brexit deal that would break years of political deadlock since Britain voted in 2016 to leave the EU.
But he has been under pressure to deliver on his promise, including from working-class cities like Blyth, which were conquered by ruling conservatives after voting for Brexit.
Johnson’s assessment that Britain would “prosper enormously” under WTO rules with the EU – what he calls “Australian terms” – has not been well received by all.
Tariffs and quotas would increase the cost of the business that would be passed on to consumers in the form of higher prices in an economy already reeling from the impact of the coronavirus pandemic.
As a whole, the EU is Britain’s largest trading partner. Australia, by comparison, is the EU’s 19th largest trading partner.
The country’s former prime minister, Malcolm Turnbull, warned Johnson on Thursday: “Be careful what you wish for.
“Australia’s relationship with the EU is not from a trade point of view that I think Britain would want, frankly,” he said.
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