- Boris Johnson has called on Brussels to make a final offer on access to British fishing waters to break the Brexit deadlock, as the EU’s Michel Barnier said the trade and security talks were entering the final “few hours”.
- The two sides are at loggerheads over whether the EU will be able to impose tariffs on British goods should the UK close its seas to European vessels after a new transition period of unspecified length, with less than two weeks to go before the end of the current transition period.
- Johnson said “Our door is open. We’ll keep talking. But I have to say that things are looking difficult. And there’s a gap that needs to be bridged,”. “We’ve done a lot to try and help, and we hope that our EU friends will see sense and come to the table with something themselves. That’s really where we are.
- Johnson said “no sensible government” could sign up to a deal that did not allow the UK to retain control of its laws and its fishing rights.
- Barnier said the main obstacle to a deal was over whether Brussels would be able to hit British goods with tariffs if the government closed its fishing waters to EU fishing fleets in the future.
- Barnier warned Downing Street that the time had come “when decisions need to be taken”. “When it comes to access to markets without tariffs and quotas and the UK would like to regain its sovereignty over fisheries, to be able to control access to its waters and, as I’ve said on many occasions, I’ll reiterate that here: we can accept that and we respect that,” he said.
- “But if following a critical period of adjustment that is deemed necessary, if the UK then wants to cut access to these waters for European fishermen, at any given time, then the European Union also has to maintain its sovereign right to react or to compensate by adjusting the conditions for products, and especially fisheries products to the single market.
- The government has said that after a transition period it wants exclusive access to the zone six to 12 nautical miles from the British coastline and the repatriation of 60% of the EU’s current catch by value in UK seas. French and Belgian fleets have fished off the UK coast for centuries, and Barnier has said he cannot fully satisfy the British demands on quotas.
- Following a telephone call between Johnson and the European commission president, Ursula von der Leyen, on Thursday night, Downing Street said the negotiations were in a “very serious” state, and that a no-deal outcome remained “very likely”.
- Speaking in the European Parliament on Friday, the EU’s chief negotiator said it was “the moment of truth” for the two sides to come to an agreement. He said there was still a “chance” of a deal, but the “path is very narrow”.
- Mrs von der Leyen said bridging “big differences”, particularly on fishing rights, would be “very challenging”, while Mr Johnson said a no deal scenario was “very likely” unless the EU position changed “substantially”.
- Labour leader Sir Keir Starmer accused the government of “dithering over Brexit”, calling for the PM to “get this deal done” and “deliver it for the British people”.
- Mr Barnier said it was the UK that decided on the deadline and the EU would have been willing to extend the so-called transition period into next year so talks could continue.
- The talks taking place in Brussels between Mr Barnier and his UK counterpart, Lord David Frost, are aimed at breaking the deadlock on key issues that remain unresolved. They include rights to fishing waters from 1 January and what is known as the “level playing field” – where the EU does not want UK businesses to get an unfair advantage by moving away from its rules and standards.
- On the level playing field, he said there needed to be “fair competition” in place, adding: “If the sovereign United Kingdom would like to depart from those standards, that is their right, but it brings with it consequences when it comes to access to our markets without tariffs or quotas.”
- Speaking on a visit to Manchester, Mr Johnson said the UK position was “always that we want to keep talking if there is any chance of a deal”. But he called for the EU to “recognise the UK has got to be able to control its own laws – that’s what people voted for – and we have also got to be able to control our waters and fishing rights”.
- Keir Starmer, Labour leader, wants to back a Brexit deal to try to win back Eurosceptic voters in “red wall” seats, which were lost to the Conservatives in last year’s general election. The alternative, he has repeatedly argued, would be to risk the economic damage of a no-deal Brexit.
- That position has prompted a backlash among many pro-EU party members, MPs and shadow ministers who believe the party should abstain on what they say is likely to be a “wafer-thin” free trade agreement. Some junior frontbenchers are privately threatening to resign if and when MPs are whipped to back a deal.
- To help justify the decision to back any deal secured by Prime Minister Boris Johnson, Sir Keir is planning to seize on a new “freedom” or evolution clause expected to appear in any Brexit trade deal. The mechanism has emerged as a compromise to EU demands for the UK to automatically align with Brussels’ future regulatory standards in areas such as subsidies for companies, environmental protection and labour rights.
- The UK’s Brexit negotiating team, led by David Frost, has now accepted the principle of having such a mechanism if there are safeguards to prevent the EU unilaterally punishing UK business with lightning tariffs. Recent talks have focused on working out the role of independent arbitration and specific remedies. Hopes of a deal over the weekend remain high despite both sides insisting that there are still gaps to bridge on the key question of EU fishing rights in UK waters.
- One Labour figure, who said the party “clearly” wanted a Brexit deal given the party’s long-term opposition to no deal, said the evolution clause would continue to give the UK influence over rights and protections.
Michel Barnier warns EU-UK trade deal talks have reached ‘moment of truth’ – FT
- 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”.
- Britain’s prime minister Boris Johnson warned that Brexit talks remained “difficult” and urged the EU to “see sense” and improve its terms for a future trade deal. “Our door is open,” he said on a trip to Manchester. “We’ll keep talking. But I have to say that things are looking difficult and there’s a gap that needs to be to be bridged.
- On the sticking point of EU access to UK fishing waters, the EU’s chief negotiator said any 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. Mr Barnier 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.
- The EU is calling for a fisheries transition period of eight years, with guaranteed access to British waters and stable fishing quota rights, while the UK 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 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.
- Leaders of the European Parliament’s political groups told Mr Barnier on Thursday that they would still be prepared to ratify a deal this year provided it was reached by midnight on Sunday — a deadline reiterated by MEPs on Friday.
- On Friday, the CBI, the UK employers group, published 48 recommendations for the UK and EU to help ease 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 companies to adjust to new customs arrangements after January 1.
Weekly European Update
- Michel Barnier has declared before the European Parliament that there are only a couple of useful hours left to make a deal.
- After a conference call with Johnson, Von der Leyen “welcomed substantial progress on many issues. Yet big differences remain to be bridged, in particular on fisheries. Bridging them will be very challenging.“
- A UK spokesperson for Johnson was more negative saying that a deal is “unlikely” unless the EU makes important concessions. Michael Gove added that the chances of reaching a deal are less than 50%.
- Negotiations will continue while the European Parliament said a deal needs to be reached at the latest on Sunday to allow the EP to vote on it.
- The Belgian ministry of economy has released new figures on expected import duties in case of a no-deal Brexit.
- Import duties would likely amount to EUR 935 million on a yearly basis (i.e. on average 5%). The sectors which are hardest hit are the car sector (representing 21% of our export to the UK and 34% of the total import duties) and agriculture (41% of the total import duties, mainly on potato products).
- Robert Lightizer (US Minister for Foreign Trade) announced that they want to conclude a mini trade deal before President elect Biden takes office.
- The UK wants lower import duties for Scottish whiskey whereas the US wants to import meat without having to comply with the EU safety standards.
- Although the uncertainty surrounding Brexit leaves a lot of Brits worried, most don’t realize the full extent of the problems ahead. British SMEs do however realise that troubles lie ahead and a Brexit with or without a trade deal makes a huge difference.
- One real estate company owner says all her employees doing renovation works are EU-citizens and most of her materials are imported from the EU. Without a deal she doesn’t know how quickly her employees will get visa/work permits and prices for the house will go up while buying power of people will decrease. People are busy with preparing for Christmas but don’t realise that a week later the UK will leave the biggest market in the world.
- One webshop owner, specialising in designing and selling gifts, says that half of their products are sold in the EU. Without a trade deal they will have to pay import duties which they will charge to their customers. “We thought about setting up a branch and warehouse in the Netherlands but the investment is too big while we don’t have certainty on whether there will be a trade deal or not.”
- The leaders should decide now so that we can prepare.
- If no trade deal is reached, EU fishing boats will no longer be allowed to fish in British waters. The UK has announced that it will use the navy to warn EU fisher boats off and even seize them if they violate British territorial waters.
- This reminds us of the three cod wars between the UK and Iceland between the 1950’s and 1970’s. The reason for these conflicts was that Iceland expanded its territorial waters thus preventing UK fishers to fish in these waters.
- The UK used its navy to protect its fisheries and several clashes with the Icelandic coast guards ensued.
- In the end, after threats of Iceland leaving NATO, a deal was made limiting the fishing rights of the UK and leading to the loss of several thousands of jobs in the UK.
‘Just a few hours’ left for a trade agreement, EU negotiator warns –TheBrusselsTimes (18 December 2020)
- The EU and the UK have “just a few hours” left to reach a post-Brexit trade agreement, chief EU negotiator Michel Barnier warned on Friday.
- “We have very little time remaining,” Barnier told members of European Parliament, with only today “to work through these negotiations in a useful fashion if we want this agreement to enter into force on the first of January.”
- He and British negotiator David Frost are meeting in what Barnier has called “the moment of truth” in the Brexit negotiations.
Temporary rules will keep Channel tunnel open –TheBrusselsTimes (18 December 2020)
- The European Parliament has agreed a set of temporary rules aimed at keeping the Channel tunnel open to rail traffic after 31 December.
- France was mandated by the parliament back in October to negotiate a new agreement which would fix the existing Intergovernmental Commission as the main safety authority for the tunnel.
- However those negotiations are not yet complete, so the Commission proposed temporary rules to bridge the gap until the international agreement with the UK can be concluded.
- That proposal was also agreed by Coreper, the committee of permanent representatives to the EU, effectively representing the governments of the member states.
- To avoid a situation where traffic was no longer able to run from New Year’s Day because of the absence of valid safety certificates, the terms of those certificates – issued under EU law to the UK while it was a member state of the Union – will be extended for nine months.
- If a post-Brexit trade agreement can be reached by Sunday, the European Parliament is prepared to hold an extraordinary plenary session before the end of the year for its approval.
- The approval of the European Parliament is crucial, as otherwise, the outcome would also be a no-deal Brexit, according to some MEPs (others have argued that the agreement could enter into provisional application until the approval has been granted).
- Chief Brexit negotiator for the EU Michel Barnier told MEPs on Thursday that reaching a deal would be “difficult but possible.” The biggest issue remains fishery, on which the EU and the UK cannot seem to find consensus. “The discussion is still very difficult“, Commission President Ursula von der Leyen was quoted on Wednesday.
- According to von der Leyen, the path to a Brexit deal is “very narrow, but it is there“. “Continuing to try finding a solution“, said von der Leyen, “is the only responsible and right course of action“.
Can UK expats return to Belgium after 1 January? – TheBrusselsTimes (11 December 2020)
- Brits working in Belgium who are travelling to the United Kingdom for the Christmas holidays can rest assured that they will still be able to return after 1 January, regardless of the coronavirus ban on non-essential travel as a result of Brexit.
- Travel for work is considered an essential reason to travel, so while there will be border controls, Brits will be able to re-enter the country using their old residence cards (which will still be valid, according to the cabinet of State for Asylum and Migration, Sammy Mahdi). However, they will have to apply for new resident cards for after Brexit.
- Belgian citizens or people with a Belgian residence permit can always return to Belgium, even if the reason for their journey out of the country was a non-essential one.
- See also:
- Zeebrugge is ready for a no deal – TheBrusselsTimes (15 December 2020)
- Opinion: Breezy Brexiteer free trade bonanza promises face lopside leverage test – Joe Kirwin via TheBrusselsTimes (15 December 2020)
- Tories protest UK government’s gunboat diplomacy – TheBrusselsTimes (13 December 2020)
- Royal Navy on standby to repel foreign fishermen – TheBrusselsTimes (12 December 2020)
- Eurostar terminal in Brussels will be modified for customs needs – TheBrusselsTimes (11 December 2020)
Disagreements remain deep, further discussions are needed – France 24 (18 December 2020)
- Negotiations on a post-Brexit trade deal are due to continue between Brussels and London on Friday (18 December), while fishing remains a major point of contention.
- British Prime Minister Boris Johnson said on Thursday that a “No deal” was “very likely“, unless the European Union changes its position.
- European Commission President Ursula von der Leyen on Thursday (December 17th) said there was “significant progress” on a post-Brexit trade deal between London and Brussels but added that fishing remained a big obstacle to its successful conclusion.
- “We welcome significant progress on many topics. However, there are still big differences to overcome, especially on fisheries. It will be very difficult to overcome them,” she said on Twitter.
“The British must accept the rules” says Thierry Breton – Europe 1 (14 December 2020)
- European Commissioner for the Internal Market Thierry Breton said the British must respect European rules for the internal market. He also said the British are not necessarily in a strong position on the fishing issue.
- “The British are obviously friends, we tell them ‘you are welcome and here are our rules“, he said. “And by December 31, they will either have accepted the deal that we are offering to all those who want to come to the European internal market, or they will refuse. It is that simple.” Moreover, the British are well aware of EU rules, says Thierry Breton as “they helped put them in place“.
- On fisheries, according to Mr Breton: “The organization of the British fisheries means that almost all of the production of catches is done on the continent. Fishermen need the continent to process the products, but also to sell them. So there are joint interests.“
- The European Commissioner hopes that an agreement will be found. Not to mention that in the event of a “no deal”, customs duties will have to apply and mechanically “increase prices quite significantly in Great Britain“. Europe “will continue to export, but it will be more expensive for the British consumer“.
London and Brussels announce continuing discussions before the break scheduled for December 31 – Le Monde (13 December 2020)
Brexit on Amazon
- Discussions to secure a trade deal between the UK and the EU were initially due to end on Sunday 13 December.
- Ursula von der Leyen and Boris Johnson said in a joint statement it was “responsible” to avoid a failure with serious consequences, just eighteen days from the final break between the UK and the EU.
- The differences seem irreconcilable between the British who want to regain total commercial freedom, and Europeans anxious to protect their single market. The UK will abandon the single market and customs union on December 31.
- Without a trade agreement, trade with the EU will be carried out under the World Trade Organization rules, with customs duties or quotas that could further weaken economies already weakened by the coronavirus pandemic.
- The discussions continue to stumble on three topics: fisheries, dispute settlement mechanisms in the future agreement and competition rules.
- The Commission published last week emergency measures to maintain, in the event of a “no deal”, air and road transport between the UK and the EU for six months, as well as reciprocal access to fishing waters for one year.
- Boris Johnson warned that the most likely scenario remains a no deal and said the UK was prepared for this scenario.
- Chief Financial Officer of the BMW Group, Nicolas Peter, wants to prepare in case of a No-Deal Brexit, which is estimated will cost the company a three-digit million amount in euros per year.
- At BMW Group, two of the three brands (Mini and Rolls-Royce) are based in the UK which represents the fourth largest market for the group. In addition, the Munich-based BMW Group sends around 100 trucks with parts to the UK every day.
- A large number of the Minis produced are exported back to the EU. But these cars would be subject to a 10% tariff from January onwards without a trade agreement.
- Since the Minis produced in the UK will become more expensive for all EU customers, the group is considering using factories in Germany and China to replace the one in Oxford. A factory in Leipzig can produce the Mini Countryman from 2024 and a Mini production deal has been agreed with a manufacturer in China.
- BMW managers have repeatedly made it clear to the government in London that the Oxford site is only competitive in the long term with close ties to the EU.
- Even if there was a Brexit without a deal, the BMW group is nevertheless prepared for the short term. The British plants and suppliers have set up large warehouses, and a sum in the tens of millions has been invested in IT to be able to handle customs formalities.
- The group has already secured capacities in cargo planes that can bridge bottlenecks. However, that only helps for the moment.
- BMW currently has to save billions in order to be able to afford the expensive switch to electric mobility. The company can therefore not afford a three-digit million euro burden from the UK location for long.
- In view of the high likelihood of a hard Brexit, Lufthansa Cargo (the cargo subsidiary of Lufthansa) is examining an expansion of capacities.
- Lufthansa Cargo has already ensured that all available loading capacities can actually be booked and is currently examining an increase in airfreight services on routes to and from the UK, for example by means of larger or additional aircrafts.
- Since supply chains across the Channel are expected to be disrupted, industry players are turning to and relying on air freight as well as expanded warehousing. For example, Porsche has stored components from the UK that should suffice for around two weeks in Germany to prepare for the possibility of delivery problems.
Thursday’s call proves to UK Prime Minister, Boris Johnson, and von der Leyen how difficult it is to bridge their differences – FortuneGreece (18 December 2020)
- Downing Street stated last night that trade negotiations with Brussels were in a “serious state” and that no agreement would be reached with the EU, unless the Commission changed its stance substantially.
- Johnson warned von der Leyen, once again, that time is running out. If no agreement is reached, the EU and the UK will part ways amicably, and the UK’s trade with the EU will be on a par with Australia.
There is a glimmer of light at the end of the tunnel, but negotiators are not there yet! – Skai (16 December 2020)
- President of the European Commission, Ursula von der Leyen, explained that the days to come are critical. Fisheries still remain the key issue of controversy between the EU and the UK.
- With respect to the two other fundamental bones of contention, the ‘level playing field’ on competition rules and the future dispute mechanism that would govern the implementation of the deal, von der Leyen explained that there is progress being made.
- In particular, the EU and the UK seem to be close to a mechanism that would prevent deviation from the rules of competition.
- Regarding the monitoring of the implementation of the agreement and the settlement of the disputes that may arise, von der Leyen announced that this issue has been resolved in general.
- As is well-known, UK nationals are in search of a solution that would help them move freely within the EU. To that extent, many of them are interested in buying properties in Greece, among other countries, and thus obtaining residence permit in a Member State.
- This is where the Greek ‘Golden Visa’ programme enters. One of the key advantages of the programme is the lower prices in the domestic real estate market, as compared to France, Spain, Portugal and Italy. The disadvantages are the greater distance from the UK and the lack of infrastructure in certain areas (e.g. in the islands).
- On top of this programme, the Greek government has introduced many tax incentives in favour of non-Greek nationals that want to transfer their tax residence to Greece. A recent example is the new tax rate of 7% on personal income for all foreign retirees that choose to stay in Greece for more than six months a year.
- Spain and Cyprus offering similar programmes are the most popular alternatives; the interest for the Greek Golden Visa programme has increased by 30%.
Johnson wants to avoid a no-deal scenario – Philenews (14 December 2020)
- Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy for the UK, underscored in his interview at Sky news that the EU must respect the fact that the UK is a sovereign independent country now.
- When asked whether critical supply chains would be disrupted in a no-deal scenario, Sharma stressed that he is convinced of the contrary. However, he highlighted that Johnson does not want the UK to leave the EU without a deal.
Coastal EU member states outline fishing limits – RTE (18 December 2020)
- The EU’s chief Brexit negotiator Michel Barnier has been in intensive discussions with EU coastal member states on their margins for manoeuvre as the overall fisheries negotiations with the UK enter a critical phase.
- The EU has suggested that it could forgo between 15%-18% of the value of the €650 million caught by European fleets in UK waters each year. The UK by contrast is looking for a 60% share of what European boats currently catch and want the new regime to be phased in after three years.
- The British government also wants to differentiate between demersal and pelagic stocks with the latter being stripped out of the overall agreement altogether and in future dealt with through an informal forum of coastal states which includes Russia, Iceland, the Faroes and Greenland.
- EU sources say that in this scenario, the UK would end up with a vastly bigger share of demersal stocks, such as cod and haddock.
- The UK also wants European boats to be excluded from its 6m-12m coastal zone from day one.
- It is understood that Mr Barnier is now offering a phase-in period of eight or seven years, down from ten years. He is also prepared to increase the offer of quota share to the UK to up to 23%. However, in his discussions with senior advisors from member states this morning Mr Barnier has received significant resistance.
- The UK’s chief negotiator David Frost said progress in the post-Brexit trade talks with the EU “seems blocked“. He tweeted: “The situation in our talks with the EU is very serious tonight. Progress seems blocked and time is running out.”
- Separately, a Downing Street spokesperson said it was “very likely” a Brexit trade deal would not be secured without a significant shift from Brussels.
- Minister for Agriculture and the Marine Charlie McConalogue said a status-quo deal has been agreed for Irish fishermen for the first three months on 2021 so they can continue to fish post-Brexit.
- Speaking on RTÉ’s Today with Claire Byrne, he said quota levels have been set temporarily based on what way they fished at the start of this year.
- He said Ireland had to fight for the quota in relation to the seasonal patterns about how fish are caught, but it has now been agreed and fisherman “can go fishing”.
- The Government is doing all in its power, he said, to hold a strong line in the last-minute Brexit negotiations to protect reciprocal access and hold the quota share for Irish fishermen.
- But he said that there is a growing sense that a deal is possible. He said the strong hand and strong position maintained by the EU on fisheries is the reason why it is still an outstanding issue.
- The Minister for Foreign Affairs, Simon Coveney, has said neither of two remaining obstacles in relation to Brexit are easy to resolve.
- He said while he is hopeful that it can result in a successful agreement, “we have to be ready for both outcomes“. Mr Coveney said “because the negotiating teams have gone really quiet here, there are no briefings out to the media, that’s an indication to me that there’s a serious, if difficult negotiation continuing“.
- He said he has always been optimistic a deal is possible and that it makes no political or economic sense for the EU and the UK not to have a future agreement in place because of all of the disruption would cause to economies and political relationships.
- He said “the motivation here given the cost of failure is to get a deal done“.
Britain seeking to extend NI food supply grace period to all retailers – RTE (14 December 2020)
- Britain is seeking to extend a post-Brexit grace period to all Northern Ireland retail that currently will exempt supermarkets bringing in food products from mainland Britain from additional checks, Northern Ireland Secretary Brandon Lewis has said.
- A joint UK/EU committee working out how to implement the tailor-made Northern Ireland arrangements agreed last week to exempt supermarkets from completing export health certificates for three months and told them that there would be no change to current regulations around chilled meats for six months.
- The main trade body representing wholesalers and independent retailers such as smaller convenience stores have demanded the same terms to avoid being put at a competitive disadvantage.
- “Our view is that grace period should apply to retailers moving products from Great Britain into Northern Ireland and we are working to ensure we get that clarity as quickly as possible,” Mr Lewis told BBC Northern Ireland.
- “We are working with the EU to try and ensure that we can make this work for all businesses. Obviously the impact of the wider trade agreement has an impact on this as well.”
Short no-deal period possible in January, says Barnier – RTE (14 December 2020)