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Since the UK made the decision to leave the EU in 2016, one of the big questions has been whether it will be with or without a trade deal, and what it may contain. The UK formally left the EU on January 31, 2020 and the parties have been in intense negotiations on a deal ever since.
In early December, Boris Johnson declared that the British had to prepare for a “no deal”, that is, a hard Brexit. Now, however, it appears that the parties can come to an agreement anyway, perhaps as early as Wednesday night.
In the time of the Count
Several major media outlets, including The Guardian and Reuters, report that diplomats in the EU and the UK say a deal is imminent.
– Things fit together, an EU source is said to have told The Guardian.
When asked if this could mean that an agreement can be reached during Wednesday, a source close to the calls replies “most likely yes.”
According to Bloomberg News, which also quotes anonymous officials, a draft agreement is ready, but distributors are still working on the details.
In the last 72 hours, the head of the European Commission, Ursula von der Leyen, and Boris Johnson have had more or less constant contact, reports both The Guardian and the Financial Times.
The deadline to complete the deal is December 31. If there is a draft agreement, it must first be translated into the 27 official languages of the EU, before being ratified. Both parties have stated that they want to reach an agreement before the transition period after Brexit expires on December 31.
The consequence of not having an agreement in force could be an increase in taxes on imports of goods between the parties.
Negotiations on fishing rights
Recently, negotiations have largely revolved around fishing related rights, respectively fishing rights in waters around the UK. Fishing is not a very important part of either party’s economy, but it still carries a lot of political clout, and many Brexiters view control of fishing waters outside the UK as a symbol of British sovereignty, writes The Guardian.
The British financial newspaper Financial Times notes that the issue of rights related to fishing is less financially important. Negotiations on fishing rights amount to a maximum of a few tens of millions of euros, which is a very small part of the total trade agreement.
Pause?
If, contrary to expectations, there is no deal on Wednesday or Thursday, the dealers are expected to take a break, writes the AFP news agency. In that case, it will hardly be a long Christmas vacation.
On Tuesday, EU chief negotiator Michel Barnier said he had rejected the latest offer from his British counterpart David Frost.
An agreement on competition rules and the application of an agreement are also issues that have persisted to the end, but should be very close to a solution.
The pound gets stronger
The British pound strengthened 1.3 percent against the US dollar on the news of a potential trade deal.
The pound reached its highest point in two years last week, then a British pound was worth 1.36 US dollars. Following the news that a trade deal is closing, the pound has risen and is seeking a new high: On Wednesday night, a British pound is worth US $ 1.35.
Savvas Savouri, chief economist at hedge fund Toscaund, tells the Financial Times that we are now looking at two possible scenarios. If there is no trade agreement, the pound could drop to $ 1.10. However, if there is a deal, it could go as high as $ 1.50.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our cases via a link, which leads directly to our pages. Copying or other use of all or part of the content may only be done with written permission or as permitted by law. For more terms, see here.
