EU says Brexit trade deal still snagged on three issues: diplomats

[November 20, 2020]  By Gabriela Baczynska and John Chalmers

BRUSSELS (Reuters) - The European Union and Britain remain at odds in last-ditch trade talks over fishing rights, guarantees of fair competition and ways to solve future disputes, even though they are very close to agreement on other issues, EU diplomats said on Friday.

The diplomats were briefed by a senior member of the bloc's executive European Commission, which is negotiating a new trade pact with Britain on behalf of the EU's 27 states, behind closed doors on Friday about the latest in the troubled Brexit talks.

"We are both close and far away. It seems that we are very close to agreement on most issues but differences on the three contentious issues persist," a senior EU diplomat told Reuters after the briefing.
 

The chief Brexit negotiators suspended direct talks on Thursday after a member of the EU team tested positive for COVID-19, but officials continued working remotely to clinch a trade deal that would come into force in just six weeks.

A second EU diplomat said of the three main sticking points: "They still need their time. Some things on the level playing field have moved, albeit very, very slowly. Fisheries are not really moving anywhere right now."

UK sources who work on state aid said Britain had offered to set up a regulator for corporate subsidies, something the EU has long asked for. But the sources said that without knowing what London's state aid regime would look like in the future, it was hard to work out rules to guide such a regulator.

An EU diplomat confirmed that Britain had made a proposal but said it fell short of the bloc's demand for a body independent from the government and with a clear mandate.

Puzzle with printed EU and UK flags is seen in this illustration taken November 13, 2019. REUTERS/Dado Ruvic/Illustration

An EU official, who is directly involved in the talks with Britain, said negotiators mostly focused on such elements of corporate fair play as well as divvying up fishing quotas in recent days: "Both of these are still very stuck."

Britain's transition out of the EU following Brexit ends on Dec. 31 and quotas and tariffs would hit bilateral trade from 2021, unless the estranged allies overcome their differences and seal a new partnership agreement that would also regulate ties from energy to transport to security.

Any agreement struck by the negotiators must still be approved by all the EU countries, as well as the European Parliament, to come into effect.

With most deadlines missed and negotiators making a last-ditch effort to seal a deal, France, Belgium and the Netherlands have asked the Commission to update emergency plans in case talks fall and there is an abrupt split in trading ties.

"Parallel to the talks there must be more clarity from the Commission about their proposals for European contingency measures in the case the talks fail," Dutch Prime Minister Mark Rutte told his EU counterparts on Thursday evening.

(Additional reporting by Philip Blenkinsop and Elizabeth Piper; Writing by Gabriela Baczynska; Editing by Hugh Lawson and David Clarke)

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