Last-Ditch Push to Brexit Deal Starts With Recriminations Flying

U.K. and European Union negotiators are resuming trade talks on Sunday as both sides strive to patch up serious last-minute differences that are threatening to derail a deal.

Officials said the next 48 hours would be crucial after U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen spoke by telephone on Saturday afternoon and agreed to restart the deadlocked talks.

The discussions had broken down the previous day with the British side accusing their EU counterparts of putting fresh demands on the table at the last minute. Johnson and von der Leyen agreed to talk again on Monday night after acknowledging that “significant differences” remain.

Amid the pessimistic noises from both sides, a British official said the resumption of negotiations in Brussels marks the last throw of the dice.

Originally, the two sides had sought to reach an accord by Oct. 15, but the negotiations have gone right to the wire. Britain is due to leave the European single market and customs union at the end of this month. With the U.K. and EU both needing time to get parliamentary approval for any deal, one needs to be reached weeks before that date so everything is ready.

Talks are “in a very difficult position, there is no point in denying that,” U.K. Environment Secretary George Eustice told Sky TV’s “Sophy Ridge on Sunday” show. “We will continue to work on these negotiations until there is no point doing so any further, but there is no point denying that what happened late last week was a setback.”

Cabinet Support

Officials on both sides said this week is realistically the last chance to get a deal. According to the Sunday Times, Johnson has the backing of his cabinet if he opts to walk away. Thirteen ministers, including eight who opposed Brexit, will support no-deal if Johnson thinks it’s necessary, the newspaper said.

Although the EU has said it will never be the one to walk away from the negotiations, it sees Thursday’s summit of the bloc’s 27 leaders, where they would be asked to sign off on any deal, as a natural end point. Negotiators are striving to reach a deal on Monday, or Tuesday at the latest, one official said.

“Significant differences remain on three critical issues,” Johnson and von der Leyen said in a joint statement after their call, which lasted about an hour. These are the level playing field for businesses, fisheries, and the governance of any agreement -- disagreements that have dogged the talks since they started in March.

“Both sides underlined that no agreement is feasible if these issues are not resolved,” according to the joint statement.

Without an accord, businesses and consumers will be left facing the cost and disruption of tariffs and quotas, while relations between the U.K. and EU could be poisoned for a generation.

Blame Game

A small team of British negotiators would go to Brussels on Sunday morning and work to see if they could bridge the final gaps, a U.K. official said. There is barely any time left and the process may conclude without a deal, the official added.

Irish Foreign Minister Simon Coveney struck a more positive note. Speaking to the Sunday Independent, he said: “We are more likely to get a deal than not because I think it’s in everybody’s interests.” A trade agreement, he said, is “97% or 98% done.”

However, Eustice said Britain has long been preparing to leave without a deal and remains ready to do so “if that’s what transpires.”

The U.K. blamed France for hardening the EU’s position. On Friday, the country’s European affairs minister, Clement Beaune, said his government will veto any deal if it isn’t in its national interest. On Saturday, Beaune told the Journal du Dimanche that the negotiations were a “test of sovereignty” for the EU and the U.K.’s demands over fisheries are “unjustifiable.”

One person familiar with the EU side of the discussions said several member states were now lining up behind France to block a deal if too many concessions are made.

The U.K. has blamed the EU for making new demands -- including on so-called ratchet clauses that would bind Britain to EU labor and environmental standards as they evolve over time, and a review of any agreement on fishing after 10 years, according to a person familiar with the British position. An EU official denied that the proposals were new.

For its part, the U.K. has offered to delay any changes to the EU’s share of the fishing catch for three years, according to a person familiar with the EU side. This is unacceptable to the bloc, the person said.

The talks are also stuck on how the U.K.’s state-aid rules would be regulated, as well as on how any agreement would be enforced. The EU wants to be able to punish any breaches of the deal by the U.K. with retaliation in other areas -- something Britain has so far rejected.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.