Brexit hangs in the balance ahead of new Sunday deadline

Britain told the European Union on Thursday it should make significant concessions to break the impasse in Brexit trade talks by the end of the weekend to give some clarity about the finale to the five-year-old Brexit crisis.

Prime Minister Boris Johnson and the European Union’s chief executive Ursula von der Leyen gave themselves until the end of the weekend to seal a new trade pact after failing to overcome persistent rifts over a “lively” dinner of turbot on Wednesday.

“There’s still clearly some scope to keep talking but there are significant points of difference that remain,” Foreign Secretary Dominic Raab told BBC TV, adding that both sides needed to take stock at the weekend.

“Sunday I think is an important moment,” Raab told Sky News. “You never say never in these talks, but I think we do need to get some finality.”

The pound extended its losses against the dollar and the euro, down 0.6% against the dollar at $1.3318 at 0829 GMT GBP=D3. Versus the euro it was down around 0.7% at 90.755 pence EURGBP=D3.

Raab said the main points of contention - fisheries and commitments on a level playing field - were narrow in scope but they were matters of principle for Britain.

“Substantial movement,” he said, was needed on both issues for talks to continue beyond Sunday.

Britain formally left the EU in January, but has since been in a transition period during which it remains in the EU single market and customs union, meaning that rules on trade, travel and business have stayed the same.

That ends on Dec 31. If by then there is no agreement to protect around $1 trillion in annual trade from tariffs and quotas, businesses on both sides will suffer.

Failure to agree new rules to govern everything from car parts to Camembert would snarl borders, shock financial markets and sow chaos through supply chains in a world already grappling with the economic cost of Covid-19.

Tesco Chairman John Allan has warned that food prices will go up if Britain leaves the EU’s orbit with no deal. Raab, asked about the remark, said there may be some changes in food prices.

GOING IT ALONE

Johnson portrays Brexit as a chance to give Britain a fully independent, more agile economy. EU powers fear London wants the best of both worlds - preferential access to EU markets but with the advantage to set its own rules.

That, they say, would undermine the post-World War Two project which sought to bind the ruined nations of Europe - and particularly Germany and France - into a global trading power.

The EU wants Britain to remain tied to the bloc’s labour, social and environmental standards in the future, as well as to state aid rules for corporate state subsidies.

Raab, however, said the EU’s position on the level playing field had “hardened”.

“There’s the substantive requirements of the level playing field and then there’s the remedies... but let’s be clear the EU has hardened its position,” he told BBC radio.

Ireland’s European Commissioner Mairead McGuinness said she believed “there is a deal to be done” with Britain but that it was impossible to predict if negotiations would be successful.

“I hope that we all get a Christmas present over the weekend. An early one,” McGuinness, commissioner for financial services, told Ireland’s RTE radio.