A British Union flag, also known as a Union Jack, sits on display at a fishmongers stall at Billingsgate Fish Market in London, U.K. (Photographer: Simon Dawson/Bloomberg)

The Fish, the Rock, the Border: EU’s Caveats to the Brexit Deal

(Bloomberg) -- European Union leaders have a few final caveats to throw into the Brexit deal.

Their gathering on Sunday in Brussels won’t just rubber stamp the terms of the U.K’s withdrawal from the bloc. The 27 remaining governments will also issue a statement containing thinly veiled warnings, preparing the ground for what could be even more difficult negotiations after March 2019, when Britain won’t be a member of the club any longer.

Here’s what the statement will say, according to the latest draft obtained by Bloomberg:

  • The EU will demand that a fisheries agreement building on “existing reciprocal access and quota shares” is concluded before the end of the post-Brexit transition period. Negotiating such an agreement may prove a controversial task for the British government, as Prime Minister Theresa May faced accusations of “selling out” Scottish fishermen in a debate this week in the House of Commons. But the wording of the EU’s statement indicates that failure to reach an agreement on fish could jeopardize the prospects of a comprehensive trade deal by 2020.
  • The U.K. will also be told that the treatment of any potential request to extend the transition period beyond 2020 will depend on fulfilling its obligations, including those applying to the Irish border. And even though the two sides will establish a joint committee to decide on the potential extension of the transition period, the bloc’s governments will vow to stay involved and provide “political direction.”
  • EU leaders will also explicitly confirm that any future deal between the EU and the U.K. won’t automatically apply to Gibraltar. The fate of “the Rock” will be subject to a separate agreement between the bloc and the U.K., over which Spain gets an explicit veto.
  • Finally, the U.K. will be warned once again that the EU won’t tolerate deregulation and unfair competition, as the bloc’s governments “will demonstrate particular vigilance” in making sure British environmental standards remain aligned, the rights of citizens are safeguarded, and a so-called “level playing field” is maintained.

©2018 Bloomberg L.P.