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EU feels 'tide is turning' in Brexit trade talks

European Council President Charles Michel, left, and the EU's chief Brexit negotiator Michel Barnier - Yves Herman/Reuters
European Council President Charles Michel, left, and the EU's chief Brexit negotiator Michel Barnier - Yves Herman/Reuters

The “tide may be turning” in the Brexit negotiations after the UK signalled its commitment to sealing a free trade deal with the EU, Brussels sources said on Friday.

However, EU diplomats warned that the bloc would never sign up to a trade agreement while there was “a gun on the negotiating table” in the form of the Internal Market Bill.

EU and UK negotiators meet in Brussels next week for what is seen as a crucial round of talks, if a mid-October deadline to finalise the agreement and avoid no deal is to be hit.

Negotiations were thrown into disarray by the Government’s Internal Market Bill, which overrides parts of the Brexit Withdrawal Agreement. Brussels accuses the UK of breaking international law and warned that the trade talks were at stake.

Downing Street now plans to delay enshrining the Internal Market Bill until December.

Government sources signalled the controversial legislation could be amended if a trade deal is agreed by the October 15 EU summit in Brussels.

“Things have improved but there is no way the EU will sign a trade deal when a gun is still on the table,” an EU diplomatic source said, indicating that the Bill would have to be changed eventually.

“We are looking for a deal and we are hearing positive noises from London but now is the time for the Brits to put the cards on the table,” said the source, “nice words and mood music won’t cut it.”

Simon Coveney, the Irish Foreign Minister, told BBC Radio 4 it would be an “enormous failure of politics and diplomacy” if the deal could not be agreed by the end of October deadline.

Simon Coveney, the Irish Foreign Minister said it would be an “enormous failure of politics and diplomacy” if the deal could not be agreed by the end of October deadline - Tom Honan/PA
Simon Coveney, the Irish Foreign Minister said it would be an “enormous failure of politics and diplomacy” if the deal could not be agreed by the end of October deadline - Tom Honan/PA

The October deadline gives EU governments time to ratify the trade agreement before the end of the transition period on December 31. Failure to strike the deal by January 1 will mean the UK and EU trading on World Trade Organisation terms.

“It seems like the tide is turning,” an EU official said, as another source added, “There is a sense of cautious optimism.”

There is speculation that the softening of the tone in London comes after Boris Johnson was shocked by a London School of Economics  report suggesting that no deal would cost Britain up to three times more than coronavirus pandemic.

British officials want to agree a joint text for the deal by the October 15 European Council, which coincides with a deadline set by Boris Johnson and would give EU leaders a chance to give their blessing to the agreement.

An EU diplomat said: “It is encouraging that the UK is flagging it is still pursuing a deal but now it comes to substance. We need a significant move on the outstanding issues.”

“We are now in the final period of negotiations. There remains a lot of work to be done” a UK Government official said before pointing to differences on fisheries and the level playing field guarantees.

The EU is demanding stronger and clearer guarantees over the future direction of the UK’s state aid policy, and the independence of its competition regulator, after backing down on its initial stance that the UK should follow EU subsidy laws.

A deal is there to be done on fishing, sources on both sides believe,  with UK quotas increasing over time. However, there remain numerous details to still be thrashed out.

Brussels is also adamant that the free trade deal and fishing agreement be part of the same overarching treaty, with a cross-cutting enforcement mechanism, which the UK resists.

The UK official said: “If the gaps in these areas are to be bridged, the EU’s more constructive attitude will need to be translated into more realistic policy positions.”

Viktor Orban, the Prime Minister of Hungary, said the EU only had itself to blame for Brexit - Bernadett Szabo/Reuters
Viktor Orban, the Prime Minister of Hungary, said the EU only had itself to blame for Brexit - Bernadett Szabo/Reuters

Viktor Orban, the Prime Minister of Hungary, said the EU only had itself to blame for Brexit.

“I think Brexit was mainly a mistake of the European Union,” Mr Orban said before admitting Hungary could not “afford” to leave the bloc.

“Brexit is a brave decision of the British people about their own lives … we consider it as evidence of the greatness of the British,” the authoritarian leader said.

New checking facilities for goods arriving in Northern Ireland from Great Britain will not be ready for the end of the Brexit transition period, a senior official confirmed.

Additional regulatory checks will be needed from January 1 but the deadline would be missed, said Denis McMahon, the permanent secretary in Stormont’s Department of Agriculture Environment and Rural Affairs.

Charles Michel, the European Council president, warned the bloc would insist on fair competition.

"Access to the EU's large market will no longer be sold off," he tweeted

"From now on, we will better enforce the level playing field, in a market open to those who respect its standards. Whether they leave our Union or want to move closer to it."