With just a month to go until the end of the transition period, UK and EU leaders warned each other yesterday (30 November) that time is running out to secure a deal.
If a free trade agreement is not finalised before the end of the year – including ratification in Brussels – UK trade with Europe will be conducted under WTO rules from 1 January 2021, leading to higher tariffs.
Talks in London have been “quite difficult” with “massive divergences” remaining on fisheries, economic fair play and settling disputes, an EU source told Reuters.
Irish minister Simon Coveney said that “time is running out” while German Chancellor Angela Merkel admitted some EU member states were losing patience with the protracted negotiations.
However, according to Politico, there have been signs of progress on some of the most contested points including fisheries as well as state-aid.
Frustration in finance talks
There is also continued frustration over negotiations for access to European financial markets for the City of London.
The EU has delayed its decision on granting the UK ‘equivalence’ status which it needs to maintain current access to EU financial markets.
It will only do so when it judges that the UK’s regulatory framework in the financial sector is robust and equivalent to its own.
The City of London is worried about a loss of business and influence as investment managers and banks execute their trades in EU countries rather than London, the FT reports.