Brexit talks facing critical week as deadline looms

Brexit | | MIC Customs Solutions |

Michel Barnier is in London for last-ditch talks on a Brexit deal as both sides dig in on the key issue of fishing rights.


Brexit negotiating teams from the EU and UK are embarking on a crunch few days of talks in a bid to overcome the remaining barriers to a trade deal as time threatens to run out.

EU chief negotiator Michel Barnier has returned to London for in-person talks, after face-to-face discussions were replaced by video calls earlier this month. This was due to Mr Barnier being forced to self-isolate when a member of his team tested positive for Covid-19.

Some commentators have suggested the fact Mr Barnier has traveled for physical discussions is a signal that progress is being made. Last week, he was reported to have told his UK counterparts over video conference that he did not see any point in coming to London unless the UK moved towards the EU’s positions.

However, it is reported that although politicians on both sides believe there is still time to come to a deal, there has been little movement on some of the most contentious issues, with neither party appearing willing to back down.

Can a last-ditch deal be done?

Speaking at the weekend, UK foreign secretary Dominic Raab said a deal could be reached within days, provided both sides can work to resolve some of the major obstacles.

In an interview with Sky News on Sunday (November 29th), he said: "If they show the pragmatism, the goodwill and the good faith that in fairness I think has surrounded the last leg of the talks, and certainly we’ve shown in our flexibility, I think there’s a deal to be done."

This was echoed on Monday by the prime minister's spokesman, who told reporters the UK is keen to see negotiations conclude as quickly as possible. Boris Johnson, meanwhile, has signaled that the ball is now in the EU's court, with the UK having made its red lines clear.

Politicians in Europe, however, have urged Mr Barnier not to be "intimidated" by the UK's position. Clément Beaune, France's European affairs minister, said: "The British need a deal more than we do. The Europeans must be convinced of this, and convinced of their strength in this negotiation. This is the best way to defend our interests and our priorities."

Familiar sticking points remain

While agreements have been reached on most aspects of a post-Brexit deal, there are still disputes on a couple of key issues on which neither side has so far shown much willingness to compromise - namely the level playing field and fishing rights.

The UK is said to want a quota system that would give it a much larger catch allowance for its fishing fleet than what is being proposed by the EU, which is seeking to keep quotas largely in line with pre-Brexit levels.

To break the deadlock, Mr Barnier is said to have offered a deal in which between 15 and 18 per cent of the fish quota European fleets currently take from British waters is returned to the UK. 

However, the British government has described this offer as "wholly unacceptable" and is said to be holding out for a figure of around 80 per cent. It has also called for these quotas to be reviewed each year, whereas the EU favors a longer-term deal.

Although fisheries make up only a small part of the UK economy, Mr Raab explained the UK views it as a key point of principle that, as an independent coastal state, it should have control of its waters.

Businesses brace for disruption

With time rapidly running out for a deal to be agreed by the negotiating teams and be ratified by parliaments in Westminster and Brussels, several industries have begun to brace for the possibility of the transition period ending on December 31st without a deal.

The automotive sector, for instance, is reported to be stockpiling parts and moving vehicles in both directions across the English Channel to avoid the possibility of being hit by tariffs if a deal is not reached.

If the two sides cannot reach an agreement, charges of ten per cent would be applied to automotive components shipped between the UK and the EU under World Trade Organization rules, so carmakers are racing to ensure production can continue uninterrupted.

The Guardian reports Honda has stockpiled parts to ensure it can continue making its Civic model in Swindon - although the factory is already scheduled to close in 2021 - while Volkswagen is one of several manufacturers to increase its number of imports before the deadline.

A source at one large carmaker told the newspaper: "If there's an opportunity to get vehicles into the country before January you’d be silly not to."