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British and European Union negotiators moved closer to a trade deal on Thursday (New Zealand time), raising hopes that a chaotic economic breakdown between the two sides could be avoided on New Year’s Day, authorities said.
After resolving some outstanding fair competition issues, negotiators last dealt with EU fishing rights in UK waters as they worked to secure a deal for a post-Brexit relationship after nine months of talks.
Kirsty Wigglesworth / AP
A view of the Christmas tree outside 10 Downing Street in London as people wait for news of the Brexit trade negotiations.
Sources on both sides said the negotiations were in a final phase, with an EU official saying: “I hope to see some white smoke tonight. The official asked not to be identified because the talks were still ongoing. The British government said a deal could come as early as Wednesday night, but it was not guaranteed.
Customs controls and some other barriers will be imposed under any circumstances on January 1, but a trade agreement would avoid the imposition of tariffs and tariffs that could cost both parties billions in trade and hundreds of thousands of jobs. Britain withdrew from the EU on January 31 and the economic transition period expires on December 31.
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British Prime Minister Boris Johnson has always insisted that the UK “will prosper tremendously” even if no deal is reached and the UK has to trade with the EU on the terms of the World Trade Organization.
But his government has acknowledged that a chaotic exit is likely to lead to stagnation in British ports, temporary shortages of some goods and price increases for staple foods. Tariffs will be applied to many UK exports, including 10 per cent on cars and more than 40 per cent on lamb, hurting the UK economy as it struggles to recover from the impact of the coronavirus pandemic.
Virginia Mayo / AP
A member of the British delegation loads a cauldron of soup into a van outside the UK Mission to the EU in Brussels.
Rumors of a pre-Christmas trade deal have emerged in recent days based on progress on outstanding issues beyond fishing. However, some EU nations insisted that, upon close scrutiny, Britain’s latest proposals on quotas for EU vessels in UK waters were far less conciliatory than first appeared.
On Thursday, the negotiation on quotas and transition times for EU vessels to continue fishing in UK waters were in full swing, with progress reported from various sides.
In London, UK Cabinet Minister Robert Jenrick said: “We will have to solve those final problems, and there is a long way to go.” He said that he was nevertheless optimistic.
The EU has long feared that Britain would undermine the bloc’s social, environmental and state aid rules in order to gain an unfair advantage with its exports to the EU.
Britain has said that having to comply with EU rules would undermine its sovereignty. On those issues, a compromise was reached, said a diplomat from an EU country.
Virginia Mayo / AP
Britain’s chief negotiator David Frost arrives at the UK Mission to the EU in Brussels.
If both parties fail to meet the January 1 deadline, it is unclear under what conditions the trade would take place before a deal is finally approved.
In recent days, Johnson and the president of the EU Commission, Ursula von der Leyen, have become increasingly involved in the talks and have been in contact by phone to unblock the negotiations.
Virginia Mayo / AP
A child plays inside a giant Christmas ornament outside the EU headquarters in Brussels. The talks continued on Thursday in a bid to strike a trade deal between the European Union and the United Kingdom, before the Brexit transition period ends on New Year’s Day.
Businesses on both sides are clamoring for a deal that would save tens of billions in costs. Failure to reach a post-Brexit deal would create further chaos at Britain’s borders with the EU in early 2021, when new tariffs from both sides would add to other impediments to trade.
The border is already recovering from new restrictions on travelers from Britain to France and other EU countries due to a new variant of the coronavirus spreading across London and southern England.
A UK minister said on Thursday that some 4,000 trucks were stuck in traffic jams near Dover, waiting for their drivers to be tested for viruses before they could enter the Eurotunnel to France.
Kirsty Wigglesworth / AP
Trucks parked on the side of the road while the port remains closed, in Dover, southern England.
While both sides would suffer financially from failing to reach a trade deal, most economists believe Britain would be hit the hardest, at least in the short term, as it relies relatively more on trade with the EU than the other way around.
