“So we have finally found an agreement. It was a long and winding road but we have got a good deal to show for it,” E.U. Commission President Ursula von der Leyen said at a press conference.

The deal should avert a chaotic economic break between the two sides on New Year’s Day, after fears of lines at ports and tariffs between the two sides if no deal was achieved.

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U.K. Prime Minister Boris Johnson was expected to speak moments later but tweeted “The deal is done” as his E.U. counterpart was speaking.

Boris Johnson@borisjohnson

The deal is done.

The agreement now goes to the 27 E.U. nations seeking unanimous approval, as well as the blessing of the E.U. and British parliaments. The deal had appeared doomed just weeks ago, with issues such as E.U. fishing rights in U.K. waters proving to be a sticking point, and Johnson warning Brits that they should prepare for no deal.

Reuters reported this week that E.U. negotiators were prepared to cut the value of its fish catch in British waters by about 25%, but Britain wanted a 30-35% reduction. Meanwhile, the U.K. wants to limit E.U. access over three years, while the E.U. wants a six-year timeframe.

But after resolving the remaining fair-competition and almost all fisheries issues on Wednesday, negotiators combed through hundreds of pages of legal text that should become the blueprint for a post-Brexit relationship.

The details are likely to be scrutinized and widely debated ahead of its ratification in London and from European nations. It will remain to be seen if key Eurosceptics in Johnson’s Conservative Party will accept it.

But   one of the architects of the original Brexit referendum, declared victory ahead of the announcement – even as he expressed possible reservations about the details of the accord.

“On the big stuff, the war is over,” he said.

Despite the breakthrough, key aspects of the future relationship between the 27-nation bloc and its former member remain uncertain. But it leaves the mutually dependent but often fractious U.K.-E.U. relationship on a much more solid footing than a disruptive no-deal split.

ON THE CUSP OF BREXIT TRADE DEAL, EU AND UK HASH OUT FINAL DETAILS

Johnson will now claim to have delivered on the promise that won him a resounding election victory a year ago: “Get Brexit Done.”

Even with a deal, trade between Britain and the E.U. will face customs checks and some other barriers on Jan. 1, when the U.K. leaves the bloc’s single market and customs union. A trade deal would avert the imposition of tariffs and duties that could cost both sides billions in trade and hundreds of thousands of jobs. Britain withdrew from the E.U. on Jan. 31, and an economic transition period expires on Dec. 31.

Over the past few days, Johnson and von der Leyen have been drawn more and more into the talks, speaking by phone in a bid to unblock negotiations that have dragged on for months, hampered by the coronavirus pandemic and by the two sides’ opposing views of what Brexit entails.

Rumors of a pre-Christmas trade deal surfaced in recent days based on progress on the main outstanding issues: fishing, fair competition, and resolution of future disputes.

Businesses on both sides are clamoring for a deal that would save tens of billions in costs.

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While both sides would suffer economically from a failure to secure a trade deal, most economists think Britain would take a greater hit, because it is smaller and more reliant on trade with the E.U. than the other way around.

The Associated Press contributed to this report.

Source: https://www.foxbusiness.com/markets/uk-eu-brexit-trade-deal

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Northern Ireland secretary Brandon Lewis told the House of Commons that the internal markets Bill to be published on Wednesday will see Britain reneging on its treaty commitment to the EU.

“This does break international law in a very specific and limited way. We’re taking the power to disapply the EU law concept of direct effect required by article 4 in certain very tightly defined circumstances,” he said.

“There are clear precedents for the UK, and indeed other countries, needing to consider their international obligations as circumstances change.”

The internal markets Bill to be introduced on Wednesday and a finance Bill planned for later this year will give British ministers the power to decide which goods moving from Great Britain to Northern Ireland are at risk of proceeding into the EU single market and whether goods moving in the other direction should require an export declaration. The legislation will also limit the scope of EU state aid rules to ensure they do not have an impact on the UK beyond Northern Ireland.

Condemn

The British government’s chief legal adviser, Jonathan Jones, resigned in protest against the move and former prime minister Theresa May was among a number of Conservative MPs to condemn it.

“The United Kingdom government signed the withdrawal agreement with the Northern Ireland protocol. This parliament voted that withdrawal agreement into UK legislation. The government are now changing the operation of that agreement,” she said.

Minister for Foreign Affairs Simon Coveney told the Dáil that any unilateral departure by from the terms of the withdrawal agreement could seriously erode and damage political trust not only in the negotiations but within Northern Ireland at a time of extreme sensitivity.

“While we still await publication of the legislation, earlier this week we raised media reports and briefings on this issue with the UK through diplomatic and official channels. We expressed our concern at these reports. My concerns have been exacerbated by the additional comments deliberately made in the House of Commons today openly committing the UK government to break international law,” he said.

British and EU negotiators began an eighth round of negotiations about their future relationship in London on Tuesday, with both sides warning that time was running out.

Deeply worried

President of the European Parliament David Sassoli said after a meeting with the EU’s chief negotiator, Michel Barnier, that he was deeply worried at the lack of progress in the talks.

“We fully expect the United Kingdom to honour the responsibilities that it negotiated and signed up to last year, especially in regard to the rights of citizens and Northern Ireland,” Mr Sassoli said.

“Any attempt by the United Kingdom to undermine the agreement would naturally have serious consequences.”

Sinn Féin MP Chris Hazzard said the British government had shown a disregard for the North and now appeared to be set to remove the only safety net under Brexit by undermining and hollowing out the protocol.

“The withdrawal agreement is an international agreement and it must be maintained and protected in order to protect our economy and our peace agreements.”

But DUP MP Sammy Wilson said he was pleased that the British government was open to changes to the protocol, adding “we will judge the legislation on its impact rather than the headlines and speculation”.

Source: https://www.irishtimes.com/news/world/brexit/brexit-trade-deal-hopes-fade-as-britain-plans-to-renege-on-agreement-with-eu-1.4350115

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LONDON – An EU-UK no-trade deal would have a big negative effect on British manufacturing, says a report Wednesday, particularly on volume car production, as it tries to recover from the slump caused by Covid-19.

The worst-case scenario would introduce delays at the UK-EU border and add costs and disrupt tightly interwoven supply chains, says the report ‘Manufacturing and Brexit’, by UK in a Changing Europe.

The report reviews evidence on the effects Brexit on the UK manufacturing sector and finds these will be disruptive and negative. The extent of disruption depends on the outcome of the UK-EU negotiations.

Few manufacturers have found any benefits from Brexit which, even if a deal is agreed, will cause significant disruption.

Manufacturers are especially worried about the UK falling out of common EU regulations. They want the UK and EU technical, safety, and other regulations to remain aligned. If they do not, then manufacturers will have to make products to different specifications for the UK and EU markets. They also want an agreement that means they do not have to carry out safety and other tests twice.

There are a big range of potential additional financial costs for companies due to tariffs, customs declarations, certification costs, audits, loss of R&D collaboration, border delays, EU customers switching to other suppliers, visa costs for EU workers, and more.

These would all add to the costs of doing business, with no discernible benefit, with some sectors particularly exposed. Nearly half of all goods imports and exports come from or go to the EU.

Many UK manufacturers have grown to depend on frictionless trade with the EU to maintain efficient supply chains. EU manufacturing workers often plug key skills gaps, such as in engineering, in the UK.

The importance of manufacturing for the UK economy far outstrips its relatively small size (10% of the UK economy). Manufacturing accounts for a disproportionate share of total exports (45%) and 65% of private-sector R&D spending.

Some services only exist because they are closely tied to manufacturing. Shocks to UK manufacturing will have a major impact on the broader UK economy.

Another big challenge for manufacturing is uncertainty around Brexit – just six months until the transition period ends, it is still unclear what will happen. The uncertainty, combined with Covid-19, is making it difficult for businesses to prepare for the post-Brexit business environment.

Industry does not know how data protection will work, whether and how they will still be able to employ EU staff for short periods of time, how state support for manufacturers will function, and so on.

This uncertainty has already contributed to falling investment in sectors such as automotive and has been cited as a factor in Nissan pulling its XTrail model from Sunderland.

The report finds a number of actions the UK government could take to mitigate the negative effects of Brexit on the manufacturing sector. They include:

• Investing much more in an industrial policy, bringing the UK in-line with other advanced economies
• Targeting specific sectors or regions
• Particular firms can be helped to take advantage of new technologies that are part of the fourth industrial revolution
• Introducing new policies on skills, R&D, financial support, wage subsidies, tax deferrals, taking equity stakes in companies
• Transferring more power to UK’s regions and devolved institutions to develop more place-based industrial policies.

Professor David Bailey, senior fellow of UK in a Changing Europe, warned particularly about no-deal: “A no trade-deal scenario is seen as the worst-case scenario for sectors like automotive given the impact of tariffs. But even a minimal Free Trade Agreement could bring disruption for manufacturers, for example via its impact on supply chains and in terms of regulatory divergence.

“Whatever the form of Brexit at the end of the transition period, manufacturing faces multiple challenges in terms of recovering from the impact of Covid-19, transforming towards carbon net-zero, and embracing Industry 4.0. A more place-based and devolved industrial policy could be one way of helping manufacturing meet such challenges.”

Source: https://www.eubusiness.com/news-eu/brexit-manufacturing.24iw

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The PM’s Europe adviser David Frost and EU chief negotiator Michel Barnier will meet again in London next week

The government has responded to an EU call to “make up its mind” by revealing plans to publish a draft post-Brexit trade deal within the next nine days.

David Frost, the prime minister’s EU adviser who is leading the UK’s negotiating effort, on Monday said he would unveil a draft-free trade deal before next week’s next round of talks with Brussels.

This would be included among other “legal texts” to be tabled in advance of the negotiations in London between 18-20 March, Mr. Frost said on Twitter.

It came after European Commission president Ursula von der Leyen called on the UK to decide on its approach to talks, following last week’s first round of negotiations.

She told reporters in Brussels: “We are aware that there are differences in the approach towards what scope should the future agreement have and what are – if I may say so – the rules of the game everybody has to abide to.

“So it will be important that the UK makes up its mind – the closer they want to have access to the single market, the more they have to play by the rules that are the rules of the single market.

“If this is not the UK’s choice then, of course, they will be more distant and it will be more difficult for the UK to access the single market.

“So I think it’s up to the UK within the negotiations to think about the trade-offs they want to take into account.”

Downing Street hit back at Ms von der Leyen’s comments, with the prime minister’s official spokesman saying: “The UK has made up its mind very decisively and has been very clear about what it wants from its future relationship with the EU.”

Boris Johnson has repeatedly said he is chasing a future trading relationship with the EU similar to that enjoyed by Canada, although Brussels has downplayed the chances of such an agreement being struck.

The UK has been told it faces “a different ball game” to the EU’s trade negotiations with Canada.

Following last week’s first round of negotiations, the two sides admitted there were “significant” and “very, very difficult” differences between them.

These relate to EU demands for the UK to maintain a “level playing field” with Brussels’ rules and standards; the role of the European Court of Justice (ECJ) and the European Convention on Human Rights (ECHR); governance; and fisheries.

The UK formally left the EU on 31 January but has entered an 11-month transition period until the end of the year in which it maintains the status quo of membership of the bloc.

Some have doubted whether the timeframe is long enough for the two sides to agree on a future trade deal, but Mr. Johnson has vowed not to extend the transition period.

Source: https://news.sky.com/story/uk-to-publish-draft-trade-deal-in-next-nine-days-after-eu-says-make-your-mind-up-11953846

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The prime minister said it was now “their call” whether they wanted a deal or not.

It comes as the First Minister of Wales Mark Drakeford said he shares “fundamentally different views on Brexit” to Mr. Johnson after the pair met this evening.

Welsh sheep farmers have previously warned of “civil unrest” in the event of no-deal.

A Welsh government spokesperson said after Mr. Johnson and Mr. Drakeford’s meeting this evening: “The first minister repeatedly warned of the catastrophic impact Brexit would have on Wales and pressed the prime minister on what support would be available for Welsh industry and agricultural sectors – no details given about new or alternative markets.

“The first minister pressed the prime minister to hold a second referendum to test the views of the people.”

Mr. Johnson had earlier visited a poultry farm near Newport where he said Wales’ farming sector would have the support it needs in the event of no-deal.

The prime minister added: “If their markets are going to be tricky, then we will help them to find new markets.

“We have interventions that are aimed to support their incomes.”

Meanwhile, Welsh Secretary Alun Cairns has suggested new global markets, including in Japan, will be available to sheep producers after Brexit.”

Helen Roberts, development officer for the National Sheep Association (NSA) in Wales called on Mr. Johnson to “stop playing Russian roulette with the industry, which he appears to be doing at the moment”.

Asked about the possibility of civil unrest, including roadblocks and tractor protests, among sheep producers, she told BBC Radio 4’s Today: “I think they will, I think it’s time to come and stand up for ourselves and be counted.”

Mr. Johnson’s declaration that it will be the EU’s fault if the UK fails to secure a Brexit deal came after he clashed with the Irish prime minister over the controversial backstop in the pair’s first discussions.

In a first phone call with Leo Varadkar since becoming UK prime minister – on his sixth day in 10 Downing Street – Mr. Johnson repeated his stance that he will only agree to a Brexit deal that “abolishes” the backstop.

But, offering no sign a Brexit breakthrough is close, Mr. Varadkar repeated the EU’s position that the UK’s withdrawal agreement cannot be renegotiated.

Inserted into the UK’s yet-to-be ratified divorce deal with the EU, the backstop is an insurance policy designed to avoid a hardening of the border on the island of Ireland, should this not be averted by the future UK-EU trade relationship.

Mr. Johnson has described the backstop as “anti-democratic” due to its provisions for the UK to remain closely aligned to the EU for an indefinite period.

He has promised to take the UK out of the EU on 31 October “do or die”, raising the prospect of a no-deal Brexit – cited as one of the factors behind recent falls in the pound.

Giving Downing Street’s account of Mr. Johnson’s call with Mr. Varadkar on Tuesday, a spokesperson said the prime minister had told his Irish counterpart that his “clear preference is to leave the EU with a deal, but it must be one that abolishes the backstop”.

Mr. Johnson was also said to have told Mr. Varadkar that the UK government “will never put physical checks or physical infrastructure” on the Irish border “in all scenarios” after Brexit.

The prime minister has previously described how “alternative arrangements” to physical border checks could provide a solution.

But Mr. Varadkar was at odds with Mr. Johnson’s view of the backstop, according to the Irish PM’s office.

A spokesperson for the Irish leader said: “The Taoiseach emphasized to the prime minister that the backstop was necessary as a consequence of decisions taken in the UK and by the UK government.”

Mr. Varadkar was also said to have explained that the “EU was united in its view that the withdrawal agreement could not be reopened”.

“Alternative arrangements could replace the backstop in the future, as envisaged in the withdrawal agreement and the political declaration on the future relationship, but thus far satisfactory options have yet to be identified and demonstrated,” the spokesperson added.

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Mr. Varadkar also invited Mr. Johnson to Dublin to continue discussions on Brexit and efforts to restore a power-sharing agreement in Northern Ireland.

Downing Street’s account of the call did not reference a possible trip to Dublin, but the pair were said to have “agreed to stay in contact” while Mr. Johnson was “looking forward to visiting Northern Ireland shortly”.

Mr. Johnson later described a “very good conversation” with Mr. Varadkar during a visit to a farm in Newport, South Wales, as he repeated his message that the current Brexit deal is a non-starter.

“Parliament has thrown this thing out three times, everybody understands that deal won’t work, that withdrawal agreement won’t work,” he said.

Mr. Johnson was also expected to visit the Brecon and Radnorshire constituency in Wales, where a by-election is being held on Thursday that could see the prime minister have his House of Commons majority cut to just one.

The pound was trading a little higher at Tuesday lunchtime since recent falls.

It was back at €1.09 and $1.2171, meaning it had come off the fresh 28-month low of $1.2122 earlier in the day.

Source: https://news.sky.com/story/prime-minister-boris-johnson-says-no-deal-brexit-will-be-eus-fault-11773406

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