EU Trade Offer Is Unacceptable, U.K. Government Official Says

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Last-ditch talks to decide Britain’s future trading relationship with the European Union appeared no closer to a breakthrough after the U.K. dismissed the bloc’s most recent offer as “unacceptable.”

With three weeks to go before the final deadline, the current status remains “very difficult,” a U.K. government official said in a statement. “As things stand, the offer on the table from the EU remains unacceptable.”

Negotiations will continue overnight and into Sunday. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen are set to speak again later Sunday, after which they’re expected to come to a firm decision on the future of the negotiations.

“The prime minister will leave no stone unturned in this process, but he is absolutely clear: any agreement must be fair and respect the fundamental position that the U.K. will be a sovereign nation,” the government official said.

One of the key hurdles to any deal, according to Johnson, is the EU’s demand that the U.K. follow future changes in the bloc’s rules and regulations. Without an agreement, Britain will have to do business with its neighbor on World Trade Organization terms from Jan. 1, which would result in higher costs for companies and disrupt long-established supply chains.

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In a further sign that Johnson’s officials are preparing for no deal, the Sunday Telegraph reported that cabinet ministers are drawing up a package worth as much as 10 billion pounds ($13 billion)to bail out vulnerable industries -- from sheep farmers and fishermen to carmakers and chemical companies.

Regardless of whether negotiators manage to stitch together a deal and governments approve it, Johnson’s administration warned citizens and companies to expect disruptions at the border starting next month. Companies haven’t done enough to get ready, the government said.

“We have the tools to mitigate disruption and the queues at the border which will inevitably occur in the early weeks as traders adjustment to the new requirements,” the official said. “There is still more that businesses and all citizens need to do.”

The government also said it has run exercises scrambling Royal Navy vessels to prepare for the potential need to intercept EU trawlers fishing in British waters. Tobias Ellwood, the Conservative Party’s chair of the House of Commons defense select committee, called the escalation irresponsible.

©2020 Bloomberg L.P.

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