London: The U.K. and the European Union are on the verge of unveiling a historic post-Brexit trade accord as negotiators work through the night to put the finishing touches to a compromise on fishing rights.
The agreement, which will formally complete Britain’s separation from the bloc 4 1/2 years after the 2016 referendum, will comprise a deal for tariff and quota-free trade in goods and cooperation in areas from security to aviation.
While the outline of a deal was agreed on Wednesday, an announcement is now expected Thursday morning as chief negotiators in the European Commission’s headquarters in Brussels haggle over the exact wording of the final treaty.
People familiar with the situation said they didn’t expect it to derail the accord. Prime Minister Boris Johnson is planning a press conference on Christmas Eve after he’s touched base with Commission President Ursula von der Leyen.
The U.K. cabinet held a conference call on the state of the negotiations late on Wednesday while European governments were briefed by officials from Brussels. The final document would still need to be approved by Johnson and EU governments, as well as parliaments on both sides.
Johnson and von der Leyen intervened personally in recent days, holding several phone conversations, in a last-ditch bid to reach an agreement before the U.K. leaves the single market at the end of the month.
One EU diplomat said the U.K. had made concessions on fisheries in recent hours that had unlocked the deal. According to two people familiar with the matter, Johnson has accepted that the bloc’s share of the catch in U.K. waters should fall by 25% over a period of five-and-a-half years. Britain had initially sought an 80% reduction over just three years, but in recent days had offered a cut of 30%.
The bloc had refused to accept a reduction of more than 25% in the value of fish caught, saying even that was hard for countries like France and Denmark to accept, according to officials with knowledge of the discussions.
This would be phased in over five and a half years. The U.K. previously offered three years while the EU were pushing for 10.
Sterling surge
The British pound rose 1% to $1.3498, the biggest jump in almost seven weeks.
If the two sides can finalize the deal off, it would draw a line under almost five years of often tempestuous negotiations since the U.K. voted to withdraw from the EU in 2016 and lay the foundations for Britain to trade and collaborate with the bloc going forward.
As the Brexit endgame was drawing to a close, the emergence of a new strain of the coronavirus forced large parts of England into lockdown. Hundreds of trucks backed up around the southern English port of Dover in a sobering reminder of the potential consequences of ending Britain’s transition period on Dec. 31 without a deal.
Both sides have made an agreement on fishing a precondition for any wider deal over their future relationship, even if the 650 million euros ($790 million) of fish European boats catch in U.K. waters each year is a fraction of the 512 billion euros of goods traded annually between Britain and the EU.
The EU also wants to be able to impose tariffs on the U.K. if, after the fisheries transition period, the government restricts access to its waters. In its latest compromise offer, the U.K. said it would accept tariffs on fisheries but not in other areas, such as on energy, as demanded by the bloc. – Bloomberg
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