The EU and the UK end up reaching trade agreements after Brexit

The European Union and the British negotiators closed on a trade agreement on Wednesday and raised hopes that a chaotic economic crime between the two sides on New Year’s Day could be averted, officials said.

After resolving some remaining fair competition issues, the negotiators finally addressed EU fishing rights in British waters as they worked to secure a deal for a post-Brexit relationship after nine months of talks.

Sources on both sides said the negotiations were in a final phase, with an EU official saying: “I expect to see some white smoke tonight.” The official asked not to be identified because the talks were still ongoing. The British government said an agreement had been reached. may come as soon as Wednesday night, but it was not guaranteed.

Customs controls and some other barriers will be introduced in any case on 1 January, but a trade agreement would prevent the introduction of tariffs and duties that could cost both sides billions in trade and hundreds of thousands of jobs. The United Kingdom withdrew from the EU on 31 January and an economic transition period expires on 31 December.

British Prime Minister Boris Johnson has always insisted that Britain would “flourish” even if no agreement was reached and Britain had to trade with the EU on the terms of the World Trade Organization.

But his government has acknowledged that a chaotic exit is likely to lead to network locks in UK ports, temporary shortages of certain goods and price increases on basic food. Tariffs will be applied to many UK exports, including 10% on cars and more than 40% on lambs, hitting the UK economy as it struggles to recover from the effects of the coronavirus pandemic.

Rumors of a pre-Christmas trade deal have surfaced in recent days based on progress on the outstanding issues beyond fishing. However, some EU countries insisted that, after careful scrutiny, Britain’s latest proposal for quotas for EU vessels in British waters was much less conciliatory than first perceived.

On Wednesday, the transfer of quotas and transition times for EU vessels to continue fishing in British waters was in full swing, with progress reported from several sides.

In London, British Prime Minister Robert Jenrick said, “We need to get the final issues resolved, and there is something further to go on.” He said he still felt optimistic.

The EU has long feared that the UK would fall short of the bloc’s rules on social, environmental and state aid in order to gain an unfair advantage from its exports to the EU. Britain has said it would underestimate its sovereignty to have to comply with EU rules. A compromise had been reached on these issues, said a diplomat from an EU country.

If both sides do not meet the deadline of 1 January, it is unclear under what conditions the trade would take place before a deal would eventually be approved.

In recent days, Johnson and EU Commission President Ursula von der Leyen have been drawn more and more into the talks and have been in contact by telephone to unblock the negotiations.

Companies on both sides want a deal that would save tens of billions in costs. Failure to reach an agreement after Brexit would lead to more chaos at Britain’s borders with the EU in early 2021, when new tariffs from both sides would contribute to other trade barriers.

The border is already dropping from new restrictions for travelers from the UK to France and other EU countries due to a new variant of coronavirus sweeping through London and the south of England. A British minister said on Wednesday that about 4,000 trucks were stuck in traffic jams near Dover, waiting for their drivers to receive virus tests so they could enter the Eurotunnel to France.

While both sides would suffer financially from a failure to reach a trade agreement, most economists believe that the UK would get a bigger hit, at least in the short term, as it is relatively more dependent on trade with the EU than the other way around.