The Brexite negotiations between the United Kingdom and the European Union “are at a very difficult point” and “there are still some problems to overcome”, said a spokesman for the British Prime Minister Boris Johnson.
Trading talks, which were close to a breakthrough as the clock ran out until the New Year deadline, stalled again on Thursday when British officials said the EU had suddenly emerged with a new set of demands. With negotiators in London working around the clock and even ordering pizza deliveries late into the night as talks continued into the night, there was optimism that an agreement between the two sides could be reached this weekend.
However, a senior British government source claimed that Brussels was demanding new concessions “at the eleventh hour”. “A breakthrough is still possible in the coming days, but that prospect is fading,” the source said. It is not clear what demands were made, and EU officials denied this and told the BBC that there were “no surprises” from their side during the negotiations.
The current trade rules between Britain and the EU end on 31 December, when the brexite transition period ends. There is little time to reach an agreement that is agreed by the negotiators and endorsed by EU leaders, Westminster and the European Parliament. If an agreement is not reached and ratified in time, Britain and the EU will act according to the rules of the World Trade Organization, which means the introduction of tariffs. Fisheries and the so-called “level playing field”, which is intended to prevent unfair competition in state subsidies and standards, remain the main issues to be resolved in the talks.
Jill Rutter, Program Director at the Institute for Government and Senior Research Fellow at UK in a Changing Europe, reported on Newsday in Washington: “Obviously we seem to be entering the final stages of these talks with the difficult details.
“Back in October, Boris was struggling again with having wrested some concessions from the EU, and now it looks like both sides are beginning to move towards the final phase. But the ratification process is already being incredibly rushed. In the end, we won’t know what’s going on in these talks until the details go back to the MPs, it may well be that this is all for show – stalemate, pizza order. They may well iron it all out, but if, as they have said, “there is nothing to discuss”, then the negotiators simply step down?
“The EU doesn’t trust the British government, so they’ll deal with any deal that comes up – do we really have an agreement on belts and suspenders? Whatever happens, Britain will say, ‘This is a big deal’, but if you look at the British press, Boris Johnson is told, ‘Make a deal, but don’t admit anything’. Well, the only way is to make concessions in order to get an agreement. Is he prepared to take the political blow?”
Both sides are urgently seeking compromises ahead of an EU summit next week. Until then, the British government will call on MPs to reinstate controversial laws that give ministers the power to break international law by ignoring provisions of the withdrawal agreement on Northern Ireland.
This has the potential to plunge the talks into crisis if no agreement is reached, as the EU has stated that it will not agree to any breach of law. The Union has already taken the first steps towards legal action over the legislation. The UK government will also introduce the post-transition taxation bill, which reportedly contains measures to repeal parts of the divorce agreement between the Prime Minister and the EU in 2019.
British Chancellor Rishi Sunak did not mention brexit in his spending review at the end of November, but the Office for Budget Responsibility (OBR) included a no-deal scenario in its forecast for the first time in its Economic and Financial Outlook prepared in parallel to the review.
The OBR warned that a “no deal brexit” could wipe out another two percent of the economy next year and lead to a long-term decline in gross domestic product (GDP), a measure of the size of the economy. It has predicted that the economy will suffer a four per cent decline in brexite production in the long term, even if the UK and EU sign a free trade agreement.