Only hours left to seal a deal, Michel Barnier warns

There are only hours to find a Brexit deal, the European Union warned this morning.

“Moment of truth, we have very little time, only hours if we want this agreement to enter into force on Jan 1,” Michel Barnier, the EU’s chief negotiator, said. “There is a chance of getting an agreement but the path is very narrow.”

Mr Barnier spoke to MEPs with the deadline for European parliament ratification approaching at the end of the weekend. He said that the main sticking point “in the few crucial hours that remain” was the EU’s demand for a sanctions clause hitting trade with tariffs if the UK cuts access to fishing grounds for European boats

“If following a credible period of adjustment, the UK wants to cut access to these fishing waters, then the EU also has to maintain its sovereign right to react by adjusting conditions especially of products to the single market particularly fishing products,” he said.

“I don’t think it would be fair, not acceptable. If European fishermen were not allowed following transitional rights to have access to those waters when the rest of the agreement especially applying to British companies would remain stable in their rights. That wouldn’t be fair. That wouldn’t be honest.”

Mr Barnier is demanding an eight-year transition, with fishing quotas allowing the European fishing fleet to take the lion’s share of the catch remaining more or less unchanged.

Boris Johnson had called on the European Union last night to drop its demands to allow Brussels to subsidise industries across Europe while denying the UK the same rights. Mr Barnier has called for Brussels aid to be exempt from any future subsidy control regime as part of a Brexit deal.

Mr Johnson told Ursula von der Leyen, president of the European Commission, that the exemption would allow the EU to unfairly support European industries while putting UK companies at a competitive disadvantage.

The issue has been brought into focus by a €750 billion EU pandemic recovery fund and other payments that will be used to directly support many industries in countries that are significant rivals with the UK, such as France, Italy and Spain. While similar forms of government aid to industry would be subjected to subsidy control scrutiny, EU payments in the next Brussels budget would be excluded.

Michael Gove, the Cabinet Office minister, told MPs it was not something the UK could agree to. “You would have a situation where the EU, at the level of the 27 [member states] could provide [financial] support, let’s say, for the production of electric vehicles,” he said. “But if the UK said we too want to use government money to pump-prime that new technology, then the terms which the EU wants us to agree would mean that we would be prevented from doing so.” He added: “We think that that is a fundamental problem. The EU has sought for itself freedom from restraints that they won’t grant us.”

A government source said: “It is completely asymmetric and not something we can sign up to.” The source added that there were still disputes over exactly how the level playing field provisions in the deal would work after the UK backed down over its insistence that there should be no right in any circumstances for one side to impose unilateral tariffs on the other.

In an attempt to increase pressure on EU leaders, Downing Street made it clear that in the event of a no-deal Brexit the UK would not return to the negotiating table and would instead trade on WTO terms “for the foreseeable future”. A Downing Street source said: “The prime minister has always been the loudest voice in the room on this. If we don’t get a deal now we won’t be going in January to restart talks. That’s not going to happen.”

Earlier in the day Mr Barnier struck a more optimistic tone, telling a meeting behind closed doors in the European parliament that a deal could come as early as today but would be “difficult”, with a breakthrough more likely at the weekend. He told senior MEPs — a conference of the chairmen of political groups and committees in the EU assembly — that while there was progress on fair competition rules fishing remained a serious obstacle.

He said Britain had shifted on the level playing field to accept a sanctions mechanism in the event of “systemic divergence” from common standards by either side. The government has also now conceded, said Mr Barnier, on the principle of “cross suspension”, which means that a fishing dispute could result in retaliatory tariffs on the motor industry.

He said there was now agreement on non-regression and keeping alignment with common standards over time but no agreement yet on the final detail of how the UK will enforce subsidy controls. Mr Barnier told the MEPs the EU accepted that the UK would be a sovereign coastal state with the power to cut fishing access for European boats after a transition period. But, he said, the government was refusing to accept any linkage between future cuts to fishing quotas and possible EU sanctions in response.

Mr Barnier said that EU demands for “cross retaliation” in enforcement sanctions to include the City of London were another final sticking point.

Doug Bannister, chief executive of the Port of Dover, called for urgent financial support from the government. On Wednesday the government turned down a request for £33 million of funding for French passport checks on people leaving Dover, allocating the port £33,000 instead.

Dover applied for the support through the Port Infrastructure Fund, which is designed to provide extra money for changes to transport and travel rules at the borders.

Mr Bannister told the BBC: “Without this funding it’s going to make the transition more challenging than it is today. We are trying to move ourselves through the greatest period of uncertainty that this facility has seen.

“Being denied the funding for this programme, what that does mean is that we could see increased friction and increased hold-ups while we get through the opening period of the transition.”

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