Brexit: Johnson urges UK to prepare for ‘likely’ no deal scenario
MEPs have declared a trade deal must be thrashed out by this Sunday to have any chance of being ratified by the end of the year. But ahead of the deadline, the Prime Minister’s aides have warned that “intractable” disagreements over key issues mean a “no deal” conclusion to the talks is increasingly likely. They said “unreasonable” demands for continuing access to British coastal waters from French President Emmanuel Macron are threatening to scupper the negotiations.
One senior Government insider told the Daily Express: “It still feels pretty intractable to me.
“The mood of the talks turned dark very suddenly last week and there has been no sign of any improvement.”
Mr Johnson has told allies that he is determined to keep negotiating right up to midnight on December 31, when the UK’s transition out of the EU single market and customs union is due to end, to try to secure a deal.
He is firmly resisting pressure from Brussels to cave in rows over fishing quotas, industrial subsidy rules and future regulations however.
Brexit on brink as mood ‘turns dark’: No10 rages at EU ‘tying us up in knots’
“On fishing, the French are being as unreasonable as ever and demanding the status quo for 10 years. There is no way we can accept that.
“And then the EU want to exempt a string of EU institutions from state aid rules while tying us up in all sorts of knots. We cannot sign up to that either,” the Government insider said.
Mr Johnson and Ursula von der Leyen emerged from a phone call on Thursday night and concluded there were still “big differences” remaining, a statement from the European Commission president read.
A Downing Street spokeswoman said: “The Prime Minister underlined that the negotiations were now in a serious situation. Time was very short and it now looked very likely that agreement would not be reached unless the EU position changed substantially.
“He said that we were making every effort to accommodate reasonable EU requests on the level playing field, but even though the gap had narrowed some fundamental areas remained difficult.
“On fisheries he stressed that the UK could not accept a situation where it was the only sovereign country in the world not to be able to control access to its own waters for an extended period and to be faced with fisheries quotas which hugely disadvantaged its own industry.
Boris Johnson has had two calls with the EU’s Ursula von der Leyen, the latest on Thursday night
“The EU’s position in this area was simply not reasonable and if there was to be an agreement it needed to shift significantly.
“The Prime Minister repeated that little time was left. He said that, if no agreement could be reached, the UK and the EU would part as friends, with the UK trading with the EU on Australian-style terms. The leaders agreed to remain in close contact.”
Leaders of the main political groups in the European Parliament on Thursday adopted a declaration stating that MEPs will not vote on the Brexit deal before the end of the year if they cannot get a treaty text by midnight on Sunday.
MEPs “stand ready to organise an extraordinary plenary session towards the end of December, in case an agreement is reached by midnight on Sunday December 20, for the European Parliament to debate the outcome of negotiations and consider granting its consent”, the statement said.
It also called for a provisional text of the Brexit agreement to be made available to MEPs as soon as possible.
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No deal has becoming increasingly likely as trade talks remain deadlocked over key issues
And the declaration warned that failure to agree a deal would have a “negative effect” on citizens and businesses in the UK and the EU.
The UK Government insider agreed that a no deal outcome was almost certain if agreement cannot be reached by Sunday.
They said: “We have to get this sorted out, one way or the other. This weekend feels the point when that has to happen.”
Sources close to the negotiations say that, despite widespread reports of progress in the talks in recent days, huge disagreements remain over the key sticking points.
They insisted no UK-EU deal would mean a “rocky” few months with the risk of bureaucratic delays at border checks.
“It will be rocky to start with but we will thrive with or without a deal,” the insider said.
In a private meeting in Brussels on Thursday, EU chief negotiator Michel Barnier claimed to senior MEPs that he was closing in on an agreement but needed longer to get it over the line.
But he insisted the talks remain “difficult” with both sides still far apart on the key sticking point of access to fishing waters, according to a source familiar with the discussion.
One Brussels insider said: “An agreement in the coming days is possible but difficult especially on fishing.”
Another EU source added: “No real progress has been made on fisheries.”
German MEP Bernd Lange, the EU Parliament’s trade committee chairman, said missing the deadline would result in a period of no deal while a new vote is organised.
Lord Frost in Brussels on Thursday ahead of Boris Johnson’s call with the EU’s Ursula von der Leyen
A diplomatic note from the meeting, seen by the Daily Express, said: “If a deal is reached later on in December, it would be too late for the Parliament to scrutinise it. This would imply a temporary no deal period from January 1.”
A Brussels diplomat warned the EU that MEPs would not back a deal without having a say on it.
“If you bypass them, this is not the way they see themselves as this very important European Parliament,” the diplomat said, adding that a no-deal scenario remained a possibility if an agreement was not in place by the end of the weekend.”
They added: “If it is a couple of days, I think it doesn’t do too much damage. But as we move on in January, every day counts, and it will be a problem.”
Mr Barnier said the trade talks were boiling down to the “last stumbling blocks” and in their “final stretch”.
He tweeted: “Good progress, but last stumbling blocks remain. We will only sign a deal protecting EU interests and principles.”
British officials in Brussels were downbeat, claiming the wrangling “feels stuck again”.
One senior source said: “Not moving as fast as it should… let’s see.
“Things could change quickly but that’s not where it feels things are at the moment.”
Cabinet Office Michael Gove on Thursday told MPs the chances of an agreement with the EU on a post-Brexit trade deal were “less than 50%”.
Lord Frost and his EU counterpart Michel Barnier are racing against the clock to secure a deal
Giving evidence to the Commons Brexit Committee, Mr Gove said the “most likely outcome” was that the current transition period would end on December 31 without a deal.
“I think, regrettably, the chances are more likely that we won’t secure an agreement. So at the moment less than 50%,” he said.
Mr Gove has said that while the negotiations with the EU had made progress, “significant” differences between the two sides remained.
“The process of negotiation has managed to narrow down areas of difference. It is certainly the case that there are fewer areas of difference now than there were in October or indeed July,” he told the Commons Brexit Committee.
“The areas of difference are still significant and they do go to the very heart of the mandate which the country gave the Government in 2016.”
Mr Gove has said the Government will not seek to negotiate a fresh trade agreement with the EU next year if they cannot reach a deal before the end of the Brexit transition period.
The Cabinet Office minister said December 31 was a “fixed point in law,” when the transition must end.“That would be it. We would have left on WTO (World Trade Organisation) terms,” he said.
“It is still the case of course that there would be contact between the UK and European nations and politicians as one would expect.
“But what we would not be doing is attempting to negotiate a new deal.”
Boris Johnson has vowed the UK will leave the transition period with or without a deal on Dec 31
Home Secretary Priti Patel told LBC Radio: “The Prime Minister and the Government, we’ve all been very clear that we’re not walking away, we will continue to negotiate to get this free trade agreement, but of course we’re never going to accept anything that undermines or compromises our independence and our sovereignty as a country.
“Those talks continue and I can say now, if we do get a deal then obviously Parliament will come back, we will absolutely come back to finesse and do the legislation that’s required.
“But, currently, we’re in that tunnel of negotiation and our teams continue to work incredibly hard.”
Sources close to the negotiations say the Prime Minister has rejected a demand from the EU for the current access to UK coastal waters for European fishing vessels to remain in place for at least another eight years.
EU negotiators are also understood to be insisting that Brussels subsidies to firms are exempted from any treaty rules on state aid.
British officials fear that the measure could mean, for example, Brussels would be free to subsidise production of electric cars, giving European manufacturers an unfair advantage over their UK counterparts.
Yet the British Government could be banned from taking steps to protect the country’s car manufacturing industry under the state aid rule.
British officials also fear the EU could be free to pump billions into European businesses in economic recovery packages while blocking the UK Government from supporting British industry.