The EU’s chief Brexit negotiator has said there is a “narrow path” to brokering a trade deal with the UK in the coming days, while warning that success will hinge on achieving breakthroughs in difficult areas, including fishing rights.
Michel Barnier told closed-door meetings of national ambassadors and EU parliamentarians on Monday morning that some progress had been made over the weekend on the crucial issue of fair competition rules for business, even though substantial gaps remained.
But he warned that the two sides were at an impasse over EU fishing rights in British waters, which may be the most intractable issue in the talks. Mr Barnier told ambassadors that an overall future-relationship deal was possible in the coming days if the fishing dispute could be unblocked, according to two participants at the meetings.
Boris Johnson, UK prime minister, and Ursula von der Leyen, the European Commission president, announced on Sunday that talks would continue after the sides spent the weekend toiling over “level playing field” guarantees for companies. Negotiations resume on Monday in Brussels.
“There might now be a narrow path to an agreement visible — if negotiators can clear the remaining hurdles in the next few days,” an EU diplomat said after Mr Barnier’s presentation.
But the two sides are up against the clock with under three weeks remaining until Britain leaves the EU single market with or without a trade deal. Mr Johnson warned on Sunday that a no-deal scenario was still “the most likely” outcome.
Failure in the negotiations would mean tariffs on trade in goods and EU boats being expelled from their traditional fishing waters.
Mr Barnier told diplomats and MEPs that there was a narrow path to a future-relationship agreement. But he said the talks on fishing rights in UK waters were stuck on multiple points.
EU diplomats privately play down the idea that the entire EU-UK future-relationship negotiation would be derailed by the fishing issue, although it remains acutely sensitive for coastal nations such as France and Belgium.
Mr Barnier reportedly said that the two sides disagreed over the duration and terms of a transition period that would guarantee EU access to British waters for a number of years after Britain leaves the EU’s Common Fisheries Policy on January 1.
The talks have also become snarled up over recent UK demands to be able to restrict foreign ownership of UK-registered boats, crews, and fishing services companies.
Mr Barnier told ambassadors and MEPs that the important bit of progress this weekend had been on the other chief sticking point in the talks: the EU’s demands for a level playing field for its companies, those attending the meetings said.
He said that the big development had been an acceptance by the UK to work together with the EU in designing a “mechanism” to preserve fair competition.
The system would allow either side to raise concerns that its companies were being placed at a disadvantage because of differences in EU and UK regulations in areas such as environmental law or labour standards. As a last resort, the disadvantaged side would have the right to impose tariffs on imports to “re-level” the playing field.
The EU has been pushing such a plan for weeks, but Mr Johnson has argued that previous iterations amounted to attempts to pressure the UK to keep following EU rules.
The UK “moved in accepting to discuss such a mechanism”, said one official, but added the issue remained very much unresolved and that progress was “fragile”.
Mr Barnier told the meetings that there were other specific level playing field hurdles in the talks, including sectoral rules for aviation, haulage and energy.
Officials said it was unclear at this stage how long negotiations would continue in Brussels and whether they would switch to London later in the week.