The EU’s chief Brexit negotiator Michel Barnier warned on Friday that trade talks with the UK had reached a “moment of truth” with the crucial hours ahead determining whether or not there is a deal.
Speaking before the European Parliament on Friday morning, Mr Barnier said he believed an agreement was possible but that difficult sticking points remained, notably on the issue of fisheries.
“Very little useful time, some hours, is left to us, if this agreement is to take effect on January 1” when Britain’s post-Brexit transition period ends, he said, adding that the two sides would make “a last attempt to find an acceptable agreement”.
Mr Barnier, who immediately left the assembly to continue negotiations with his UK opposite number David Frost, also hinted at ideas that are being discussed to resolve the main outstanding issues in the talks.
He said that a deal on fisheries would need to include a “credible and sufficient” transition period during which EU fishing fleets could be sure of their rights in UK waters. He warned that, should the UK at any point after this decide to close its waters, the EU would need legal means to retaliate — including by cutting off its market to British exports of fish.
“If the UK . . . wants to be able to cut access to its waters for European fishermen, at any moment, the EU must also have a sovereign right to react or to rebalance, by adjusting the conditions of access to its market for all products and notably for fisheries products,” Mr Barnier said. He added that this was “one of the big difficulties at present in the talks.”
“It would be neither fair nor acceptable that European fishermen have only transitory rights which evaporate one day in British waters, while all the rest of the agreement, notably for British companies, remains stable,” he said.
The EU is calling for a fisheries transition period of eight years, with guaranteed access to British waters and stable fishing quota rights, while Britain has offered three years.
People close to the talks said EU negotiators had proposed a multi-stage transition, with a review after several years, as a way to try to bridge the gap.
On the other main sticking point of fair competition rules for business, Mr Barnier said that Brussels accepted the principle that the UK might in future want to diverge from EU regulations, but that this would also have implications for UK access to the European single market.
“If it wants to diverge in the future, that is its right, but that can’t be without consequence when it comes to having access to our market tariff-free, quota-free,” he said.
Less than two weeks now remain before Britain is set to exit the EU’s single market and customs union, with or without a deal, and Mr Barnier noted that “critical hours” lay ahead for determining if an agreement could be reached in time. Boris Johnson and European Commission president Ursula von der Leyen took stock of negotiations in a call on Thursday evening, noting that a deal was not yet at hand.
“We welcomed substantial progress on many issues,” Ms von der Leyen said after the call. “However, big differences remain to be bridged, in particular on fisheries. Bridging them will be very challenging.”
A UK government spokesperson said after the call that negotiations were in “a serious situation”. Mr Johnson told Ms von der Leyen that “time was very short and it now looked very likely that agreement would not be reached unless the EU position changed substantially”, the spokesperson said.
“It is is not surprising that the final hours — where we are — are concentrated on the most difficult, the hardest points,” Mr Barnier said.
Leaders of the European Parliament’s political groups on Thursday told Mr Barnier that they would still be prepared to ratify a deal this year provided it was reached by midnight on Sunday. The assembly’s Green group has said that there is already too little time to carry out proper scrutiny and has called for stopgap arrangements to be explored.
The Sunday deadline was reiterated by MEPs on Friday.
A no-deal scenario on January 1 would mean the imposition of tariffs on trade in goods, as well as fishermen being shut out of prized waters.
On Friday, the CBI published 48 recommendations for the UK and EU to help smooth the disruption likely to be caused by the end of the Brexit transition period, regardless of whether there is a deal or not.
Among the recommendations is a call for a six-month grace period for firms to adjust to new customs arrangements after January 1.
“Securing a deal in the next two weeks remains both essential and possible,” the CBI said. “It will provide the foundations to usher in a new relationship between the UK and the EU, based on co-operation and collaboration, not division and distrust.”