British Prime Minister Boris Johnson heads to Brussels on Wednesday for talks with European Commission President Ursula von der Leyen in a push to secure a trade deal and avoid a turbulent breakup in three weeks.
With growing fears of a chaotic no-deal finale to the five-year Brexit crisis when the United Kingdom finally leaves the European Union’s orbit on Dec. 31, the 1800 GMT meeting over dinner is cast as a chance to unlock the stalled trade talks.
A British government source said a deal may not be possible, as did EU chief Brexit negotiator Michel Barnier.
The main sticking points have been over fishing rights in British waters, ensuring fair competition for companies on either side, and ways to solve future disputes.
“There is still the chance of an agreement,” German Chancellor Angela Merkel, Europe’s most powerful leader, told German parliament. “One thing is clear: the integrity of the (EU’s) internal market must be preserved.”
“If there are conditions from the British side which we cannot accept, we are prepared to go down a road which is without an exit agreement,” she said.
Michael Gove, a senior minister in Johnson’s government dealing with Brexit issues, told Times Radio the EU would have to compromise if it wanted a deal.
“The EU has to move,” Gove said.
Britain formally left the EU in January, but has since been in a transition period during which it remains in the EU single market and customs union, meaning that rules on trade, travel and business have stayed the same.
That all ends on Dec. 31, and if by then there is no agreement to protect around $1 trillion in annual trade from tariffs and quotas, businesses on both sides would be hit.
Failure to agree a deal would snarl borders, shock financial markets and sow chaos through supply chains across Europe and beyond as the world faces the economic cost of COVID-19.
A measure of expected price swings in the British pound known as overnight implied volatility jumped 25% to the highest since late March..
BREXIT FUTURE
Johnson portrays Brexit as a chance to give Britain an independent and more agile economy. The EU’s biggest powers fear London wants the best of both worlds – preferential access to EU markets but with the advantage to set its own rules.
That, they say, would undermine the post-World War Two project which aimed to bind the ruined nations of Europe – and particularly Germany and France – into a global trading power.
“We must have a level playing field, not just for today but for tomorrow and beyond and for that we must agree how we can react when the other changes his legal situation,” Merkel said.
“Otherwise, unfair competition conditions arise to which we cannot subject our companies. This is the big, difficult question that is still in the air.”
Gove said a one-on-one meeting between leaders often produced a breakthrough and that compromise could be possible on fishing in British waters.
But Brexit-supporting lawmakers in Johnson’s party say he must ensure Britain remains sovereign, sets its own rules and keeps control of its rich fishing waters.
Britain said on Tuesday it had clinched a deal with the EU over how to manage the Ireland-Northern Ireland border, and would now drop clauses in draft domestic legislation that would have breached a Brexit withdrawal agreement signed in January.
Gove said the deal on Northern Ireland opened up “a smoother glide path” towards a possible deal. He added that if a deal was not done, finance minister Rishi Sunak would take steps to ensure British businesses were competitive.
Earlier : Following intensive and constructive work over the past weeks by the EU and the UK, the two co-chairs announced their agreement in principle on all issues, in particular with regard to the Protocol on Ireland and Northern Ireland.
The co-chairs of the EU-UK Joint Committee – European Commission Vice-President Maroš Šefčovič and the UK Chancellor of the Duchy of Lancaster, the Rt Hon Michael Gove yesterday held a political meeting to address the outstanding issues related to the implementation of the Withdrawal Agreement.
Analysists from both sides said that one hopes that the agreement in principle, should facilitate the final issues, which need to be overcome in the coming days.
An agreement in principle has been found in the following areas, amongst others: Border Control Posts/Entry Points specifically for checks on animals, plants and derived products, export declarations, the supply of medicines, the supply of chilled meats, and other food products to supermarkets, and a clarification on the application of State aid under the terms of the Protocol.
Ensuring that the Withdrawal Agreement, in particular the Protocol on Ireland and Northern Ireland, is fully operational at the end of the transition period, i.e. as of 1 January 2021, is essential. The Protocol protects the Good Friday (Belfast) Agreement in all its dimensions, maintaining peace, stability and prosperity on the island of Ireland.
The parties have also reached an agreement in principle with respect to the decisions the Joint Committee has to take before 1 January 2021. In particular, this concerns the practical arrangements regarding the EU’s presence in Northern Ireland when UK authorities implement checks and controls under the Protocol, determining criteria for goods to be considered “not at risk” of entering the EU when moving from Great Britain to Northern Ireland, the exemption of agricultural and fish subsidies from State aid rules, the finalisation of the list of chairpersons of the arbitration panel for the dispute settlement mechanism so that the arbitration panel can start operating as of next year, as well as the correction of errors and omissions in Annex 2 of the Protocol.
In view of these mutually agreed solutions, the UK will withdraw clauses 44, 45 and 47 of the UK Internal Market Bill, and not introduce any similar provisions in the Taxation Bill.
This agreement in principle and the resulting draft texts will now be subject to respective internal procedures in the EU and in the UK. Once this is done, a fifth regular meeting of the EU-UK Joint Committee will be convened to formally adopt them. This will take place in the coming days and before the end of the year.
