The United Kingdom and European Union are heading for a final battle over fishing rights as trade talks reach a climax, with officials cautiously predicting a deal within days.
The pound climbed against the US dollar on Wednesday amid optimism that the focus on fish is a sign the two sides have largely settled their differences over the other major obstacle an accord — the level competitive playing field for business.
But people close to the negotiations warned that the differences between the two sides on what access EU boats will have to UK waters are still substantial — and failure to reach an agreement would scupper the entire deal.
“On fisheries, the discussion is still very difficult,” European Commission President Ursula von der Leyen told the European Parliament. “In all honesty, it sometimes feels that we will not be able to resolve this question.”
But her tone was largely upbeat, saying there was now a “narrow path” to a deal.
In another sign that an accord may be within sight, Prime Minister Boris Johnson softened his pessimistic rhetoric about the chances of a deal. Asked at a press conference on Wednesday if he still stood by his Sunday claim that the “most likely” result is no deal, he demurred.
“That is very much a matter for our friends,” Johnson said. “They know what the parameters are.”
If a deal is reached, Parliament could be recalled to approve it as soon as next week. Both the House of Commons and unelected House of Lords will begin their Christmas vacations on Thursday. In a statement, Johnson’s office said: “Parliament has long shown it can move at pace and the country would expect nothing less.”
Officials said the discussions on fisheries will probably take some days before there can be talk of agreement. Negotiations are stuck over how long the transition period should be before any new rules and quotas apply. The UK has pushed for three years; the EU wants longer.
The two sides are also at loggerheads over how frequently access would be renegotiated: the UK wants to do it annually, but the EU wants a longer-term arrangement.
While the other major sticking point, the level competitive playing field — which for months looked like it could collapse the negotiations — isn’t completely resolved, the two sides are much closer, officials said.
The UK has given up on its long-standing opposition to cross-retaliation —the idea that either side can use a breach in one area of the agreement to slap retaliatory tariffs or quotas in another. It has also pledged not to row back from current EU labour, social and environmental standards after December 31, according to officials.
But there’s still disagreement on what happens if the EU’s standards get tougher over time. Initially, the bloc wanted the UK to change its rules in lockstep. Now, both sides have agreed to an independent mechanism that would allow for some divergence, but the details of this are yet to be completely nailed down.
In Berlin, German Chancellor Angela Merkel repeated that the EU is prepared for no deal.
“The commission is again negotiating, with all our agreement, in these hours and days until the end of the week, to see if there can still be a solution,” she told Germany’s Lower House of Parliament. “There has been progress — but no breakthrough.”