Merkel ally says chances of Brexit trade deal less than 50-50

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There is less than a 50% chance of the European Union and Britain securing a Brexit trade deal and London must move first before negotiations can progress, an ally of German Chancellor Angela Merkel said on Tuesday.

Detlef Seif, who is Brexit rapporteur for the Merkel’s conservatives in the Bundestag lower house of parliament, said that if Britain moved on fair competition and dispute resolution, the EU could move on fisheries.

The three issues have so far prevented a deal.

“At the moment, I see the chances worse than 50-50,” he told Reuters. “Britain must move on the issue of the level playing field – the principle of equal competition conditions, state support, and also on the dispute resolution mechanism.”

“That means, for me really the ball is still in Britain’s court at the moment,” Seif added. “If it is kicked back reasonably, then we can definitely readjust this or that – including fisheries… But unfortunately, we are not there yet.”

Detlef Seif, who is Brexit rapporteur for the Merkel’s conservatives in the Bundestag lower house of parliament. EPA-EFE/CLEMENS BILAN

Seif’s insistence that Britain budge in the talks highlights the reluctance of many in Merkel’s conservative bloc to concede too much ground in negotiations, a constraint that limits her ability to broker a compromise.

Britain formally left the EU at the end of January, but the two sides have been haggling over a deal that would govern $900 billion in trade, including everything from car parts to medicines, once a standstill transition period expires at the end of the year.

U.S. investment banks say the most likely outcome is a deal, though the consensus was wrong on the 2016 Brexit referendum when Britons voted by 52-48% to leave, shocking markets and European leaders.

Merkel said last week it would be best for both sides to reach a deal, “but not at any price.”

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