EU-UK on brink of Brexit trade deal

The UK and the European Union were set to announce a Brexit trade deal on Thursday, after negotiators talked through Wednesday night to finalize the details.

Downing Street and European Commission news conferences are expected later in the day.

Three sticking points have so far remained unresolved — fishing rights, government support for industry, and how the agreement will be enforced.

After its approval, the two sides will have one week to get the deal formally approved in Brussels and London.

The UK left the European Union bloc in January, but it remains under its trading rules until December 31.

On verge of Brexit trade deal

Two senior EU diplomats told DW on Wednesday that EU and UK Brexit negotiators have tentatively agreed a free trade deal after nine months of intense talks.

It comes after senior aides to European Commission President Ursula von der Leyen said earlier in the day that both sides "are in the final phase."

"An agreement is in the air," said one source close to the talks.

The bloc's chief negotiator, Michel Barnier, told MEPs on Tuesday that Christmas Eve was the final deadline to seal an agreement and avoid a possible short-term No Deal Brexit.

Ambassadors have been told to pencil in one final meeting for Thursday. But diplomats from the 27 member states urged caution.

'Last-minute hitch'

Eric Mamer, a spokesman for the European Commission, said early Thursday that negotiations to finalize a post-Brexit trade pact would last through the night.

"Grabbing some sleep is recommended to all Brexit-watchers at this point. It will hopefully be an early start tomorrow morning," Mamer tweeted.

But Irish Foreign Minister Simon Coveney said Thursday "a last-minute hitch" related to fishing has briefly delayed the deal announcement.

Earlier, Irish Prime Minister Micheal Martin told broadcaster RTE "the signs are good" for a deal. "There does seem to be a sense today that things are nearing their conclusion."

Multiple EU sources told DPA news agency on Wednesday that significant progress had been made in solving months-long deadlock on the question of fisheries, but also on competition.

Agreement hinges on fishing rights

Governments have not yet seen a copy of the text negotiated over the past nine months. They will need to sign off on any accord with the UK.

"It all depends on what has been agreed on fish," said a senior diplomat from a coastal state.

Fishing rights after Brexit have been one of the most contentious matters throughout the negotiations. British fishermen have long complained that they do not get a fair share of the stocks caught in UK waters by European trawlers.

Barnier admitted to MEPs on Tuesday night that leaders needed to step in and broker a compromise.

The issue is one of those "very political and very sensitive matters — but I can't resolve them at my level," Barnier told parliamentarians during a video conference, according to a leaked transcript obtained by DW.

Bernd Lange, a German Social Democrat and member of the European Parliament, told DW that with a deal, the two sides will have "a rules-based trade without any complication."

"It is totally clear that if we want to have an open market to resolve any quotas issue, there needs to be a safety net to ensure there is no undermining of standards, labor and environmental rights, and state aid. Now there will be a new instrument, which will enforce a level-playing field," said Lange.

Lange also said that fisheries is more of a political issue with the right-wing groups in Europe.

Done deal?

British broadcaster Sky News reported that "the deal is done" but aides to David Frost told DW that the UK team is "still negotiating."

A UK government spokesman declined to comment on which outstanding issues were left to be thrashed out.

Sources close to Barnier say that rules preventing unfair competition and how to police a deal have largely been agreed.

Officials in Brussels worried that the UK would try and undercut European firms, gaining an unfair advantage over companies across the Channel.

If both sides fail to meet the January 1 deadline, it is unclear under what conditions trade would take place before a deal would eventually be approved.

Over the past few days, British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen have been in contact by phone seeking to unblock negotiations.

Market optimism

British pound and European stock markets rose Thursday with Britain and the EU finally expected to agree on a post-Brexit trade deal.

Sterling was up around half a percent against the dollar and euro, while London's benchmark FTSE 100 index gained 0.2% ahead of an early pre-Christmas close.

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

A failure to reach a post-Brexit deal would lead to more chaos on Britain's borders with the EU at the start of 2021, when new tariffs by both sides would add to other impediments to trade.

German Foreign Minister Heiko Maas said the whole Brexit process would make EU citizens recognize the benefits of membership of the bloc. 

"I think a lot of people simply took the advantages of EU membership for granted because they are so used to them," he said, responding to written questions posed by DW.

"But Brexit made crystal clear what advantages the EU represents: Freedom of movement, free trade and the ability to live, study or work wherever one wants."

"At the moment, I really don't see a majority of states that would be willing to give that up."

This story has been updated to reflect the latest developments.