UK-EU free trade deal talks on tenterhooks as result could still go either way

Mon 7 Dec 2020
Posted by: Noelle McElhatton
Trade News

The EU’s chief negotiator Michel Barnier has warned national ambassadors and MEPs that he cannot guarantee a trade deal will be achieved, reports the FT.

As prime minister Boris Johnson and European Commission president Ursula von der Leyen paused their call this afternoon following ongoing talks between the two teams last week, the sticking points that have bedevilled negotiations remain.

Extra mile

“The outcome is still uncertain, it can still go both ways,” said one diplomat following Barnier’s briefing. “The EU is ready to go the extra mile to agree on a fair, sustainable and balanced deal… It is for the UK to choose between such a positive outcome or a no-deal outcome.”

According to sources including Irish broadcaster RTE, Barnier has set Wednesday as the deadline to achieve a deal.

Barnier also warned that a deal would founder it the UK went ahead with passing the controversial Internal Market and the Finance Bills into law, as they would breach the Northern Ireland Protocol.

Decision by Thursday

Barnier told MEPs the talks were in the “endgame” and that there would have to be a decision on whether or not there was to be an agreement by Thursday. If a deal was not possible, the European Commission would “react immediately” with contingency plans, a source said.

The Irish Times reports that Taoiseach (prime minister) Micheál Martin said it would be a “significant failure” if no Brexit deal was agreed.

“Overall … it is in the best interests of all concerned that a proper trade deal is agreed,” he said. “Our respective economies would suffer, unnecessarily in my view, in the event of a no-deal.”

Gloomy assessment

His comments follow a sober assessment by Ireland’s Minister for Foreign Affairs Simon Coveney.

“Having heard from Michel Barnier this morning really the news is very downbeat. I would say he was very gloomy and very cautious about the ability to make progress today,” he said.

Pound falls

Markets reacted to the uncertainty by marking the pound down by 1% against the dollar and the euro, reports the FT.

The pound had strengthened in the run-up to this weekend’s tense discussions, with belief that a deal would be struck. However, the continuing impasse over fishing, the level playing field, and governance, means that sterling is heading for its worst day in three months against the dollar.