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Edging into Christmas Eve, EU and UK near Brexit trade deal

December 24, 2020 GMT
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A woman walks amongst Christmas decorations outside of EU headquarters in Brussels, Wednesday, Dec. 23, 2020. France insisted on Wednesday that European Union negotiators should not yield to any time pressure imposed by the Jan. 1 economic cutoff date in the talks with Britain on a trade agreement in the wake of the Brexit divorce, arguing no deal would be better than a bad one. (AP Photo/Virginia Mayo)
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A woman walks amongst Christmas decorations outside of EU headquarters in Brussels, Wednesday, Dec. 23, 2020. France insisted on Wednesday that European Union negotiators should not yield to any time pressure imposed by the Jan. 1 economic cutoff date in the talks with Britain on a trade agreement in the wake of the Brexit divorce, arguing no deal would be better than a bad one. (AP Photo/Virginia Mayo)

BRUSSELS (AP) — European Union and British negotiators inched their way to within touching distance of a trade deal early Thursday, raising hopes a chaotic economic break between the two sides on New Year’s Day could be averted, officials said.

After resolving a few remaining fair-competition issues, negotiators tussled over EU fishing rights in U.K. waters as they worked right into Christmas Eve to secure a provisional deal for a post-Brexit relationship after nine months of talks.

Sources on both sides said the long and difficult negotiations were in their final stretch as negotiators went into another night, living off a stack of pizzas delivered to EU headquarters while they were combing through the fine print of a draft deal that runs to some 2,000 pages.

“Work will continue throughout the night,” said EU spokesman Eric Mamer.

British Prime Minister Boris Johnson held a Cabinet conference call to brief his senior ministers on the outlines of the deal, ahead of an announcement widely expected later Thursday.

Johnson and EU Commission President Ursula von der Leyen are likely to bring news of an agreement before the tentative deal goes to the 27 EU capitals seeking unanimous approval and the blessing of the EU and British parliaments.

No matter what happens, trade between Britain and the EU will face customs checks and some other barriers on Jan. 1, when the U.K. leaves the bloc’s single market and customs union. A trade deal would avert the imposition of tariffs and duties that could cost both sides billions in trade and hundreds of thousands of jobs. Britain withdrew from the EU on Jan. 31, and an economic transition period expires on Dec. 31.

Johnson has always insisted the U.K. will “prosper mightily” even if no deal is reached and the U.K. has to trade with the EU on World Trade Organization terms from Jan. 1.

But his government has acknowledged that a chaotic exit is likely to bring gridlock at Britain’s ports, temporary shortages of some goods and price increases for staple foods. Tariffs will be applied to many U.K. exports, including 10% on cars and more than 40% on lamb, battering the U.K. economy as it struggles to rebound from the impact of the coronavirus pandemic.

Over the past few days, Johnson and von der Leyen have been drawn more and more into the talks and have been in contact by phone seeking to unblock negotiations.

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Rumors of a pre-Christmas trade deal surfaced in recent days based on progress on the main outstanding issues, other than fishing.

The EU has long feared that Britain would undercut the bloc’s social, environmental and state aid rules to be able to gain an unfair edge with its exports to the EU. Britain has said that having to meet EU rules would undercut its sovereignty. On those issues, a compromise had been reached, a diplomat from an EU country said.

The economically minor but hugely symbolic issue of fish came to be the final sticking point, with maritime EU nations seeking to retain access to U.K. waters where they have long fished, and Britain insisting it must exercise control as an “independent coastal state,”

Some EU nations insisted that upon close scrutiny, Britain’s latest proposals on quotas for EU vessels in U.K. waters were far less conciliatory than first met the eye, imperiling a deal at the last minute.

On Wednesday, brokering on quotas and transition times for EU vessels to continue fishing in U.K. waters was in full swing, with progress reported from several sides.

A deal must be ratified by parliaments in both Britain and the EU. The British Parliament is currently on a Christmas break but could be recalled next week so lawmakers can vote.

Johnson’s large majority in Parliament should ensure the agreement passes, but any compromises will be criticized by hard-line Brexit supporters in his Conservative Party. The party’s euroskeptic European Research Group said it would carefully scrutinize any deal “to ensure that its provisions genuinely protect the sovereignty of the United Kingdom after we exit the transition period at the end of this year.”

If the two sides fail to meet the Jan. 1 deadline, a deal could provisionally be put in place and approved by the EU parliament in January.

Businesses on both sides are clamoring for a deal that would save tens of billions in costs.

The border is already reeling from new restrictions placed on travelers from Britain into France and other EU countries due to a new coronavirus variant sweeping through London and southern England. On Wednesday thousands of trucks were stuck in traffic jams near Dover, waiting for their drivers to get virus tests so they can enter the Eurotunnel to France.

While both sides would suffer economically from a failure to secure a trade deal, most economists think Britain would take a greater hit, because it is smaller and more reliant on trade with the EU than the other way around.

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Associated Press writer Raf Casert reported this story in Brussels and AP writer Jill Lawless reported from London.

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Follow all AP stories on the Brexit trade talks at https://apnews.com/Brexit