On cusp of Brexit trade deal, EU and UK hash out final details
Last-minute snag related to fishing said to have delayed agreement to avert chaotic end
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Reporters gathering outside London's 10 Downing Street, the home of Prime Minister Boris Johnson, yesterday. The United Kingdom and the European Union are on the verge of unveiling a narrow post-Brexit trade accord as negotiators worked through the night to put the finishing touches to a compromise on fishing rights.
PHOTO: BLOOMBERG
BRUSSELS/LONDON • Britain and the European Union were on the cusp of striking a narrow trade deal yesterday, swerving away from a chaotic finale to a Brexit split that has shaken the 70-year project to forge European unity from the ruins of World War II.
While a last-minute deal would avoid the most acrimonious ending to the Brexit divorce, the United Kingdom is heading for a much more distant relationship with its biggest trade partner than almost anyone expected at the time of the 2016 Brexit vote.
Sources in London and Brussels said a deal was close as British Prime Minister Boris Johnson held a late-night conference call with his senior ministers, and negotiators in Brussels pored over reams of legal texts.
There was no official confirmation of a deal but Mr Johnson was expected to hold a news conference yesterday - just seven days before the UK turns its back on the EU's single market and customs union at 2300GMT on Dec 31 (7am, Jan 1, in Singapore).
Irish Foreign Minister Simon Coveney said a late snag related to fishing had delayed the agreement, but that an announcement was expected later yesterday.
"There is some sort of last-minute hitch" related to "small text" of a fisheries agreement, Mr Coveney told Ireland's RTE radio after weeks of haggling over just how much fish EU boats should be able to catch in British waters. "I had hoped to be talking to you this morning in parallel with big announcements happening in both London and Brussels, but we still expect those later on today."
The UK formally left the EU on Jan 31 this year but has since been in a transition period under which rules on trade, travel and business remained unchanged. But from the end of this year, it will be treated by Brussels as a third country.
If a zero-tariff and zero-quota deal is struck, it would help to smooth the trade in goods that makes up half their US$900 billion (S$1.2 trillion) in annual commerce between the two sides.
Even with an accord, some disruption is certain from Jan 1 next year when Britain ends its often fraught 48-year relationship with a Franco-German-led project that sought to bind the ruined nations of post-World War II Europe together into a global power.
After months of talks that were at times undermined by both Covid-19 and rhetoric from London and Paris, leaders across the EU's 27 member states have cast an agreement as a way to avoid the nightmare of a "no-deal" exit.
But Europe's second-largest economy will still be quitting the EU's single market of 450 million consumers.
When the UK shocked the world in 2016 by voting to leave the EU, many in Europe hoped it could stay closely aligned. But that was not to be.
Mr Johnson, the face of the 2016 Brexit campaign, asserted that since 52 per cent had voted to "take back control" from the EU, he was not interested in accepting the rules of either the single market or the customs union.
The EU did not want to give unfettered privileges to a freewheeling, deregulated British economy outside the bloc, and so potentially encourage others to leave.
The result was a tortuous negotiation on a "level playing field" in competition - which the EU demanded in return for access to its market.
In essence, the agreement is a narrow free trade deal surrounded by other pacts on fisheries, transport, energy and cooperation in justice and policing.
At the stroke of midnight in Brussels on Dec 31, the EU will lose its principal military and intelligence power, 15 per cent of GDP, one of the world's top two financial capitals and a champion of free markets that acted as an important check on the ambitions of Germany and France.
Without the collective might of the EU, the UK will stand largely alone - and much more reliant on the United States - when negotiating with China, Russia and India.
Despite the agreement, goods trade will have more rules, more red tape and more cost.
There will be some disruption at ports.
The UK, which imports about US$107 billion more a year from the EU than it exports there, bickered until the end over fish - important for Britain's small fishing fleet but worth less than 0.1 per cent of gross domestic product (GDP).
In essence, what was the EU's most ambivalent member is exiting the bloc's orbit on New Year's Eve for an uncertain future with a trading relationship that is, at least on paper, distant.
At the stroke of midnight in Brussels on Dec 31, the EU will lose its principal military and intelligence power, 15 per cent of GDP, one of the world's top two financial capitals and a champion of free markets that acted as an important check on the ambitions of Germany and France.
Without the collective might of the EU, the UK will stand largely alone - and much more reliant on the United States - when negotiating with China, Russia and India.
REUTERS
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