U.K., EU Poised to Agree on Post-Brexit Trade Deal – A post-Brexit trade accord between the U.K. and the European Union was being held up by last-minute negotiations over fisheries, officials said, but people close to the talks said a deal should be sealed in the coming hours.
An agreement, a few days before the Dec. 31 deadline, would end more than four years of uncertainty about future relations between major U.S. allies.
At stake are the terms for around $900 billion in trade between Britain and the EU and the depth of their cooperation on law enforcement and counterterrorism, among other issues.
EU and U.K. officials said Wednesday that the talks were entering their final phase and first signaled that an announcement could come Wednesday evening. Then, after talks continued through the night, on Thursday morning.
However on Thursday afternoon, negotiations were continuing, with the two teams ensconced in the EU executive’s 13-floor 1960s Berlaymont building, snacking on deliveries of pizza and sandwiches.
“Some hours left to run,” an official said early afternoon Brussels’ time.
People close to the talks said last-minute negotiations were focused on specifying how much of various fish stocks each side’s fishing fleets would get during what’s expected to be a 5½ year transition period before the U.K. gains full control over its fishing waters.
The discussions, intended to avoid fights over the trade agreement in the coming years, also involved EU discussions with the capitals of the bloc’s coastal nations, including France, the Netherlands and Denmark.
A deal, just days before the Dec. 31 deadline, would calm the worst fears of a major economic disruption in coming weeks, as Britain unmoors from its largest trading partner. It would mean tariff-free trade between the two sides and reduce—but not eliminate—the need for many new customs and regulatory formalities at the border.
An agreement would follow months of tense negotiations and set out the terms of a much more distant relationship between Britain and the EU than at present.
It would also mark the capstone of the Brexit project, ending years of uncertainty over how tightly the country will remain entwined with the EU after it voted to leave the bloc in June 2016.
A deal would give Britain significant freedom to depart from EU regulations and to sign free-trade deals with countries such as the U.S. But as the price for securing a deal without tariffs, the U.K. won’t diverge substantially from the EU on issues such as labor and environmental standards and to maintain roughly equivalent rules on limiting government support for private companies.
Britain formally left the EU on Jan. 31 but will remain in the bloc’s single market and customs union until year’s end. Failure to reach a deal would mean that from Jan. 1, tariffs would be applied for the first time in almost a half-century on some trade between the U.K. and the EU. The U.K. sends 43% of its exports to the bloc.
Any deal will need signoff from EU capitals, as well as the U.K. and European parliaments. Leaders are expected to take a final decision early next week, officials said.
The U.K. Parliament could meet before the end of the month, but the European Parliament has said it can no longer meet this year to vote on any accord. That means an agreement may have to be adopted provisionally by EU governments until EU lawmakers can vote on it in the new year.
The issue of fisheries has dominated the talks for the last two weeks. While fishing has minor economic significance—affecting overall some €600 million, equivalent to around $730 million, annually of fish caught by EU boats in British waters—it is politically sensitive in the U.K. and in the EU’s coastal states.
