EU chief says UK trade pact closer but success not certain

December 17 ------ Britain and the EU are in the final stretch of talks to keep an estimated one trillion dollars of annual trade free of tariffs and quotas beyond Dec. 31, when the United Kingdom finally transitions out of the world’s largest trading bloc. With just over two weeks left, Prime Minister Boris Johnson said he hoped the EU would “see sense” and agree a deal that respected Britain’s sovereignty, while German Chancellor Angela Merkel said the bloc favored agreement.

European Commission President Ursula von der Leyen told the European Parliament: “I cannot tell you whether there will be a deal or not. But I can tell you that there is a path to an agreement now. The path may be very narrow but it is there.” Her relatively upbeat comments on the long-running Brexit crisis helped nudge sterling upwards on currency markets. However, von der Leyen also said two issues were still unsolved.

“We have found a way forward on most issues but two issues still remain outstanding: the level playing field and fisheries,” she said. “Issues linked to governance now have largely been resolved. The next days are going to be decisive.” The level playing field refers to EU insistence that Britain does not undercut it on environmental, labour and social standards, as well as state aid, while governance covers the resolution of disputes. Von der Leyen said discussions about access to UK fishing waters for EU vessels were still very difficult.

Britain formally left the EU on Jan. 31 but has been in a transition period since then under which rules on trade, travel and business remain unchanged. It finally exits the bloc’s single market and customs union on Dec. 31. Failure to agree a deal would erect trade barriers between the EU and Britain, snarl borders, send shockwaves through financial markets and cause chaos in supply chains across Europe as it also struggles with COVID-19.

Source: reuters.com