A last-minute hiccup over fishing has delayed the announcement of a post-Brexit trade deal between the European Union and United Kingdom. But officials assured that an announcement is expected on Thursday.
The Irish Foreign Minister Simon Coveney told Ireland’s RTE radio that there had been “some sort of last-minute hitch” in agreeing the Brexit deal. But he said he still expected the formal announcement from London and Brussels later today.
The fishing industry is important for Britain's small fishing fleet but is worth less than 0.1% of its GDP. The British government has used it as leverage in negotiations.
Sources in London and Brussels said a deal was close as British Prime Minister Boris Johnson held a late-night conference call with his senior ministers, and negotiators in Brussels pored over reams of legal texts.
News that a deal was imminent triggered a 1.4 per cent surge in the pound against the dollar. Bond yields rose across the world.
The long and difficult negotiations appear to be in their final stretch as negotiators went into another night on Wednesday, living off a stack of pizzas delivered to European Union headquarters while they were combing through the fine print of a draft deal that runs to some 2,000 pages.
The United Kingdom formally left the European Union on 31 January but has since been in a transition period under which rules on trade, travel and business remained unchanged. But from the end of this year, it will be treated by Brussels as a third country.
If UK and the EU have struck a zero-tariff and zero-quota deal, it would help to smooth the trade in goods that makes up half their 900 billion dollars in annual commerce. It would also support the peace in Northern Ireland - a priority for U.S. President-elect Joe Biden, who had warned Johnson that he must uphold the 1998 Good Friday peace agreement.
Even with an accord, some disruption is certain from 1 January when Britain ends its often fraught 48-year relationship with a Franco-German-led project that sought to bind the ruined nations of post-World War Two Europe together into a global power.
After months of talks that were at times undermined by both Covid-19 and rhetoric from London and Paris, leaders across the EU's 27 member states have cast an agreement as a way to avoid the nightmare of a "no-deal" exit.
But Europe's second-largest economy will still be quitting both the EU's single market of 450 million consumers, which late British prime minister Margaret Thatcher helped to create, and its customs union.
If there is a deal, it will cover goods but not the financial services that make London the only financial capital to rival New York. Services make up 80% of the British economy.
In essence, the agreement is a narrow free trade deal surrounded by other pacts on fisheries, transport, energy and cooperation in justice and policing.
Despite the agreement, goods trade will have more rules, more red tape and more cost. There will be some disruption at ports. Everything from food safety regulation and exporting rules to product certification will change.