UK and EU set to announce Brexit trade deal

The UK and the European Union are on the verge of unveiling a historic post-Brexit trade accord after negotiators worked through the night putting the finishing touches to a compromise on fishing rights.

The agreement, which will formally complete Britain’s separation from the bloc four-and-a-half years after the 2016 referendum, will allow for tariff and quota-free trade in goods and cooperation in areas from security to aviation.

The outline of the deal was agreed on Wednesday, and an announcement is expected Thursday. At 7:30 a.m. in Brussels, chief negotiators were still working to nail down the exact wording of the final treaty in the European Commission’s headquarters.

People familiar with the situation said they didn’t expect those discussions to derail the accord.

Prime Minister Boris Johnson is planning a press conference after he has touched base with Commission President Ursula von der Leyen. UK officials had said Johnson could appear at 10 a.m. – but, with the talks continuing, the situation could change.

The UK cabinet held a conference call on the state of the negotiations late on Wednesday while European governments were briefed by officials from Brussels. The final document would still need to be approved by Johnson and EU governments, as well as parliaments on both sides.

Johnson and von der Leyen intervened personally in recent days, holding several phone conversations, in a last-ditch bid to reach an agreement before the UK leaves the single market at the end of the month.

One EU diplomat said the UK had made concessions on fisheries in recent hours that had unlocked the deal. According to two people familiar with the matter, Johnson has accepted that the bloc’s share of the catch in UK waters should fall by 25% over a period of five-and-a-half years.

Britain had initially sought an 80% reduction over just three years, but in recent days had offered a cut of 30%.

The bloc had refused to accept a reduction of more than 25% in the value of fish caught, saying even that was hard for countries like France and Denmark to accept, according to officials with knowledge of the discussions.

This would be phased in over five and a half years. The UK previously offered three years while the EU were pushing for 10.

Sterling climbs

The pound rose 0.5% to $1.3560, though was still short of the two-and-a-half year high of $1.3624 reached last week.

If the two sides can finalize the deal off, it would draw a line under almost five years of often tempestuous negotiations since the UK voted to withdraw from the EU in 2016 and lay the foundations for Britain to trade and collaborate with the bloc going forward.

As the Brexit endgame was drawing to a close, the emergence of a new strain of the coronavirus forced large parts of England into lockdown.

Hundreds of trucks backed up around the southern English port of Dover in a sobering reminder of the potential consequences of ending Britain’s transition period on Dec. 31 without a deal.

Both sides have made an agreement on fishing a precondition for any wider deal over their future relationship, even if the 650 million euros ($790 million) of fish European boats catch in UK waters each year is a fraction of the 512 billion euros of goods traded annually between Britain and the EU.

The EU also wants to be able to impose tariffs on the UK if, after the fisheries transition period, the government restricts access to its waters.

In its latest compromise offer, the UK said it would accept tariffs on fisheries but not in other areas, such as on energy, as demanded by the bloc.

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UK and EU set to announce Brexit trade deal