Brexit trade talks enter last leg with no-deal deadline weeks away

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British Prime Minister Boris Johnson met with European Commission Chairman Ursula von der Leyen in London, UK, January 8, 2020.

Xinhua News Agency | Xinhua News Agency | Getty Images

LONDON – Britain and the European Union are in “final stage negotiations” on the Brexit trade deal according to the UK foreign minister, with only a few weeks left to approve any possible deal.

The UK ceased to be a member of the European Union in January, but it agreed to abide by European regulations by the end of 2020 so that both sides could create new trade arrangements. However, it has proved to be a difficult task since spring with talks stuck on the same three issues.

“I think this is a very important week, the last real major week,” Dominic Raab told the BBC on Sunday.

Both sides need to reach new trade arrangements and reform their respective parliaments before the end of the year. Failure to achieve that high costs and barriers for exporters on both sides – a no-deal deal scenario may arise.

According to Raab, a success depends on overcoming differences on “fairly narrow” issues. Major sticking points remain on fishing, competition policy and the rule of any future deal. They have different views on how much European fishing crews should have access to UK waters, and what kind of market competition rules should be implemented in order not to jeopardize the UK EU single market.

With reference to the possibility of a deal, according to Sky News, the EU’s chief negotiator, Michel Barnier, told reporters in London on Sunday: “Let us work, let us work.”

Before arriving in London for more talks, Barnier said on Friday that “the same important jargon remains.”

deal or No deal?

Earlier last week, European Commission President Ursula von der Leyen said that “these are decisive days” in the process, but she could not say if there would be a deal. Since then the message in London has been more positive.

Britain’s chief negotiator David Frost said on Friday that “it is late, but a deal is still possible”.

A European official, who did not want to be named because of the sensitive nature of the talks, told CNBC over the weekend that a breakthrough rested on a phone call between UK Prime Minister Boris Johnson and von der Leyen.

However, there are no plans for a call between the two yet.

Meanwhile, businesses on both sides wait for the end of the process. The British Chambers of Commerce, a trade body for businesses, warned late in September for “major gaps” in government guidance for firms, if no deal is reached.

As a member of the European Union for more than 40 years, many UK exporters rely on raw materials or customers based in Europe and vice versa.

Carmakers are reportedly stocking cars and parts to avoid a tariff strike in the event of a compromise between the UK and the European Union. Brands such as Volkswagen and Honda have large manufacturing plants in the UK and are then exported to the rest of the European Union.

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