UK, EU in final push for Brexit trade pact

BRUSSELS/LONDON • British and European Union negotiators made a last-ditch effort yesterday to bridge stubborn differences standing in the way of a post-Brexit trade deal, but they had at best 48 hours left to avoid a disorderly parting of ways at the end of this month.

"EU-UK negotiations have entered the endgame, time is running out quickly," said an EU diplomat after the bloc's chief negotiator Michel Barnier gave member states' envoys to Brussels a downbeat assessment of the state of play.

"It is for the UK to chose between... a positive outcome or a no-deal outcome."

With growing fears of "no-deal" chaos after London finally leaves the EU's orbit on Dec 31, talks resumed before British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen were set to review the situation in a call last night.

Irish Prime Minister Micheal Martin, whose country would be the hardest-hit of the 27 EU states if there is no trade accord, put the chances of a deal at 50-50.

Investment bank JPMorgan said its odds on a no-deal had risen to one-third from 20 per cent.

The British pound sterling tumbled on concerns that there would be no agreement covering annual trade worth nearly US$1 trillion (S$1.34 trillion).

Mr Barnier told members of the European Parliament in a separate briefing that negotiations could go on until tomorrow, but no further, Ireland's RTE news reported.

EU diplomats said the ball was now in Mr Johnson's court.

Ireland's commissioner in the EU executive Mairead McGuinness said: "People need to understand that the British are playing with fire here and the fire can burn everybody and that's something we should all try to avoid."

However, the Sun newspaper reported that Mr Johnson, a figurehead for Britain's campaign that led to a Vote Leave victory in a 2016 referendum, was ready to pull out of the talks within hours unless Brussels changed its demands.

In London, a lawmaker in Mr Johnson's governing Conservative Party said France would have to make concessions on fishing, and the EU would have to drop what he said were new demands on fair competition known as the level playing field.

Britain, which joined the EU in 1973, formally left the bloc on Jan 31 but has been in a transition period since then under which rules on trade, travel and business remain unchanged.

For weeks, the two sides have been haggling over fishing rights in British waters, ensuring fair competition for companies and ways to solve future disputes.

Failure to secure a deal would clog borders, upset financial markets and disrupt delicate supply chains across Europe and beyond as the world tries to cope with the vast economic cost of the Covid-19 pandemic.

Sterling fell by more than 1 per cent to six-week lows versus the euro and also dropped against the dollar to US$1.327.

With just days left for a deal to be agreed on, EU diplomats said it was a decisive moment for both Britain and the bloc which built the ruined nations of Europe into a global power after the devastation of World War II.

In a move that could further undermine the talks, the British government will press ahead with draft laws this week that would breach London's earlier divorce treaty with the bloc.

Junior Foreign Office Minister James Cleverly said yesterday the clauses that breach the treaty would be re-inserted.

REUTERS