Johnson Says No U.K. Leader Could Accept EU Terms: Brexit Update

U.K. Hopes for Dinner Breakthrough in Brussels: Brexit Update

10 Dec 2020, 01:59 AM IST

(Bloomberg) --

Boris Johnson said no British prime minister could accept the European Union’s Brexit demands as he prepared to head to Brussels for a showdown with the European Commission’s Ursula von der Leyen on Wednesday.

The premier’s team hopes the face-to-face conversation with the Commission president will inject political impetus into the deadlocked process.

If the dinner goes well, negotiators could be back in a room hammering out the details within hours. If it goes badly, officials on both sides fear the chances of an agreement being ready before the end of December -- when the Brexit transition period expires -- will fade away.

Key Developments:

Merkel says fair competition “level playing field” is vital for the future and for a deal
Traders are the most cautious about the pound since 2016
Brexit is leading to snarl-ups at ports and highways on both sides of the channel
Johnson and von der Leyen due to meet for dinner at 7 p.m. GMT (2 p.m.)

Ports Feel the Stress of Brexit (4:35 p.m.)

Brexit is fueling an increasingly frenzied demand for goods, creating traffic snarl-ups at ports and highways on both sides of the English Channel and leading to at least one major factory shutdown.

EU’s Michel: Leaders Won’t Discuss Brexit at Summit (4:25 p.m.)

EU Council President Charles Michel confirmed leaders won’t discuss Brexit at the summit that starts on Thursday.

“When it comes to relations with the U.K., negotiations are on-going based on our common mandate,” he said in a statement. “It is not the intention to plan a discussion on the matter. The President of the Commission will debrief us on the state of play.”

Wallonia Threatens Veto (4:15 p.m.)

The premier of the Belgian region of Wallonia said he could veto any trade deal the EU strikes with the U.K. if he deems it contrary to the interests of people in his area.

The threat made by Elio di Rupo, a former Belgium prime minister, is reminiscent of how the tiny French-speaking region held up, and nearly derailed, the bloc’s agreement with Canada, known as CETA, in 2016.

“I won’t hesitate to ask my parliament to use its right of veto, as it did for CETA, if the future trade deal with the U.K. crosses the red lines set by my government,” di Rupo said at the EU’s Committee of the Regions in Brussels.

It’s still not clear how much of a say regional parliaments will get in approving any Brexit deal. Only once an agreement is struck will EU lawyers decide whether any parts of it come under national jurisdiction meaning national and regional parliaments would get to vote on it.

France Tells Fishing Industry to Prepare (2:30 p.m.)

France is preparing its fishing industry to brace for the possibility no deal is struck. Minister of the Sea Annick Girardin told lawmakers in Paris that the government is poised to unveil a support package in coming days.

“Supporting the fishermen is key, because Jan. 1 will not be like Dec. 31, and yes, in negotiations we will no doubt have lost a little bit, especially on quotas,” she said. “But we are still negotiating, firm in our position.”

EU Leaders to Get Debriefed at Summit (2.30 p.m.)

The EU’s 27 leaders will be debriefed on Brexit by Commission President Ursula von der Leyen at the summit that starts in Brussels tomorrow, an EU official said. They won’t be asked to take any decisions on the ongoing talks, the official said.

Frost, Barnier to Attend Dinner (2 p.m.)

Boris Johnson and Ursula von der Leyen will be joined at Wednesday’s dinner in Brussels by their chief negotiators, David Frost and Michel Barnier, as well as “a handful” of officials, according to the U.K. prime minister’s spokesman, Jamie Davies.

The meeting won’t be a negotiation, but rather “a conversation between two political leaders trying to assess where they both stand,” Johnson’s press secretary, Allegra Stratton, told reporters. “The prime minister is going to be clear this evening that he can’t accept anything that undermines our ability to control our laws or control our waters.”

Johnson “feels there is a very good deal to be done, but he and Ursula von der Leyen both believe that there needs to be some political momentum now,” Stratton added. She also stressed that the U.K. won’t extend the negotiations into 2021.

Irish PM: Talks Are on a ‘Knife Edge’ (1:30p.m.)

Micheal Martin, Ireland’s prime minister, told parliament the chances of a deal being struck are about 50-50.

“We’re on the precipice of no deal,” he said in Dublin. “It remains to be seen how the two principals this evening, Prime Minister Boris Johnson and Ursula Von der Leyen, how they can rescue the situation in their talks this evening.”

Gove Sets Out Plan for N. Ireland (1:05 p.m.)

Cabinet Office Minister Michael Gove gave the House of Commons more details about the Joint U.K.-EU Committee’s agreement on Northern Ireland. The deal will mean trade flowing from Great Britain to Northern Ireland won’t be disrupted in 2021, he said. The accord also means:

Export declarations won’t be needed on goods moving from Northern Ireland to Great Britain;
Tariffs won’t be charged on goods that stay in Northern Ireland;
Supermarkets will have a three-month grace period to comply with the new rules;
Firms in Great Britain won’t be affected by EU state aid rules if they have no genuine or direct link to Northern Ireland;
EU officials won’t have the powers to conduct checks on goods in Northern Ireland.

Traders Cautious About the Pound (1:10 p.m.)

Option traders haven’t been this pessimistic about the pound since the U.K. voted to break away from the EU. The relative cost of hedging losses in sterling against the euro through the end of December is trading near the highest level since June 2016. Read more here.

Johnson Says No U.K. Leader Could Accept EU Terms: Brexit Update

Johnson: No PM Could Accept EU Terms (12:10 p.m.)

Boris Johnson ruled out agreeing to the EU’s existing proposals on fisheries and enforcement of fair competition rules for businesses. That came after Germany’s Angela Merkel said any U.K.-EU trade deal will hinge on agreeing to regulations on competition applying in future.

“Our friends in the EU are currently insisting that if they pass a new law in the future with which we in this country do not comply or don’t follow suit, then they want the automatic right to punish us and to retaliate,” Johnson told members of Parliament. “They’re saying we should be the only country in the world not to have sovereign control over its fishing waters. I don’t believe that those are terms any prime minister of this country should accept.”

He also said “a good deal is still there to be done” and that he was looking forward to discussing it with von der Leyen at dinner.

N. Ireland Trusted-Trader Plan Agreed: RTE (11:45 a.m.)

The EU and U.K. have agreed on a trusted trader program that would exempt as much as 98% of goods flowing between Great Britain and Northern Ireland from tariffs from Jan. 1, RTE’s Tony Connelly tweeted.

Agricultural and food products moving into Northern Ireland from Great Britain will also be exempt from export health certificates for at least three months, he added.

Ireland: Extension Possible But Unlikely (11:08 a.m.)

The U.K. may be moving to “deal making mode” after agreeing on the Northern Ireland protocol, Irish Foreign Minister Simon Coveney said, although talks on a trade deal may still collapse.

Failure is a “distinct possibility,” he told Newstalk Radio. An extension of the transition period is “possible” although “very unlikely,” he added.

Merkel on the Level Playing Field (11 a.m.)

For the European Union, managing how the two sides’ rules for business diverge over time is key to any deal. It’s something France has insisted on, and on Wednesday German Chancellor Angela Merkel sent the same message.

“We must not only have a level playing field for today, but also for tomorrow and the day after tomorrow,” she said. “And for that, we will need agreements -- how one side can react if the other side changes its conditions.”

The so called level playing field has emerged in recent days as the biggest hurdle to an overall agreement.

Dinner Date Set for 8p.m. in Brussels, BBC Says (9:10 a.m.)

Johnson and von der Leyen’s dinner in Brussels is due to start at 7p.m. U.K. time, 8p.m. in Brussels, the BBC’s Laura Kuenssberg said in Twitter post, without saying how she obtained the information.

Tesco Chairman Warns of Higher Food Prices (8:50 a.m.)

The chairman of Tesco Plc, Britain’s largest supermarket chain, warned that shoppers could pay more for food in January if the U.K. and European Union fail to agree on a trade deal.

In an interview with Bloomberg Television, John Allan said food price inflation could pick up and may average between 3% and 5%.

The retailer has stockpiled food to avoid short-term disruption, but Allan repeated his warning that Britain faces the risk of food shortages after Brexit.

Merkel Ready for No Deal (8:45 a.m.)

Chancellor Angela Merkel said Germany is prepared for the possibility of the U.K. leaving the EU’s single market and customs union without a trade deal.

Speaking to lawmakers in Berlin, she said the integrity of the common market needs to remain intact, and that the bloc can’t allow for future changes in regulations that allow unfair competition against its companies.

Johnson Probably Ready to Compromise, Varadkar Says (8:40 a.m.)

Irish Deputy Prime Minister Leo Varadkar said Boris Johnson is probably willing to make a “concession,” as the question of the level playing field continues to hamper efforts to reach a trade deal.

“I think he wants Britain to part of the world,” Varadkar said in an interview with broadcaster RTE. Still, he warned the British prime minister will be “very strong on the sovereignty point.” “That will be a circle that’s hard to square,” he said, putting the chances of a deal at 50-50.

Gove Sees ‘Scope for Compromise’ on Fishing (8:30 a.m.)

“I think there can be scope for compromise, but the compromise exists on the way in which European boats can continue to access U.K. waters,” Cabinet minister Michael Gove told BBC radio.

“What is not up for compromise is the principle that the U.K. will be an independent coastal state,” he added. “I think we can be very generous with that. I think that we can reach arrangements with European countries that allow a staged process so there can be a degree of certainty that they can manage.”

Honda Halts U.K. Production (7:58 a.m.)

Honda Motor Co. halted work at its Civic plant in the U.K. as congestion at ports trying to cope with Brexit-related demand delays delivery of components.

Gove: Deal Can Be Done Over Dinner (7:45 a.m.)

U.K. Cabinet minister Michael Gove said Johnson’s government does want a deal, “but it can’t be a deal at any price.”

He told BBC television the prime minister and von der Leyen have a “good relationship with mutual respect,” adding “it’s often round the table” that deals can be done. “The conversation between the prime minister and the president tonight, I hope, will create political momentum,” Gove said.

He also warned, though, that without movement from the EU side, a deal will be “very difficult” to achieve.

Irish Mixed Signals (7:33 a.m.)

In an interview with the Irish Times, Prime Minister Micheal Martin said he’s “on the pessimistic side” about the prospects for a deal. On Tuesday, he told lawmakers it would be “very difficult” to reach an accord. On a more upbeat note, Foreign Minister Simon Coveney said late Tuesday “hopefully’ a deal could be struck Wednesday