British Cry Foul as Brexit Negotiations Hit French Obstacle

(Bloomberg) -- Brexit trade talks that were on the verge of a breakthrough descended into a fight between the U.K. and France as the British government said the prospects of an imminent deal had receded.

With negotiators working around the clock in London, optimism had been growing for days that an agreement could be struck this weekend. But British officials said the European Union had suddenly turned up with a new set of demands on Thursday, sending the talks backward. They didn’t say what the demands were, and EU officials denied it.

The U.K.’s assessment came after French diplomats raised concerns a day earlier that the EU was making too many concessions to get a deal over the line. On Friday, France’s European Affairs Minister, Clement Beaune, reiterated his government will veto any deal if it isn’t in the national interest.

One U.K. official said talks had taken a big step backward because the EU had hardened its position in response to the French. Another said that, despite the setback, a breakthrough is still possible in the next few days.

Ireland’s Prime Minister, Micheal Martin, said that he is hopeful a deal will emerge over the weekend.

Senior figures close to the European side questioned whether the remarks from the U.K. were another case of brinkmanship to pile last-minute pressure on the talks, or an effort to disguise the fact that the British themselves are making concessions.

One official said that fundamental differences between the two sides have persisted for weeks, but that hadn’t prevented both sides believing a deal was close, while another insisted the bloc hadn’t made new proposals.

The spat sets the scene for a potential call between Prime Minister Boris Johnson and European Commission President Ursula von der Leyen.

Michel Barnier, the EU’s chief negotiator, will now remain in London on Friday for a full day of negotiations. Earlier, he had planned to return to Brussels to consult with von der Leyen and diplomats from member states, an EU official said. The ambassadors won’t be briefed on Brexit today, a spokesman for the presidency said.

It’s not unusual for assessments of the likelihood of a deal to gyrate wildly in the final days of a negotiation as both sides try to make the other blink. Nonetheless, French concerns and U.K. red lines are genuine, officials said.

French President Emmanuel Macron is determined that his fishing industry won’t lose a big part of its access to British fishing waters and wants British businesses to be tied to strict rules on state aid and labor standards so they don’t have what he sees as an unfair advantage.

“If there is a deal which is not good,” Beaune told Europe 1 radio, “then we would oppose it. We always said so.”

Equally, Johnson sees reclaiming control of fishing waters and being free to set his own rules as a matter of national sovereignty, and that was the point of Brexit.

Talks Progress

The last few days had seen some progress on all of the three main topics that need to be resolved before a deal can be reached: access to British fishing waters, the competitive level playing field, and how the agreement is enforced. But none of them are settled yet.

One French concern that talks are stuck over is an EU demand that Britain establishes a regulator for state aid that can rule against measures before they come into force. That’s the case in the European system, but the U.K. has been pushing for the regulator only to have the power to step in after the government has handed over its money.

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