UK, EU head for 'last attempt' to reach post-Brexit trade deal

The European Union and the United Kingdom are heading into the weekend on a “last attempt" to clinch a post-Brexit trade deal, with EU fishing rights in British waters the most notable remaining obstacle to avoid a chaotic and costly changeover in the new year.

The UK will leave the EU single market in less than two weeks and time has all but run out for any agreement to be approved in time to head off a severe economic shock.

British Prime Minister Boris Johnson said on Friday that the only way to get a deal is for the 27-nation bloc to compromise since “the UK has done a lot to try and help, and we hope that our EU friends will see sense and come to the table with something themselves."

“That’s really where we are,” Johnson said, adding “no sensible government" could agree to the EU demands as they stand.

EU chief negotiator Michel Barnier told the EU parliament both sides were in the “home straight of the negotiations," which have already come a long way in nine months of talks but are still short of a final compromise.

Barnier called it “a very serious and somber situation" if a deal falls through, with the jobs of hundreds of thousands of people at stake.

READ MORE: EU: Progress made in Brexit trade talks, 'next days decisive'

Countdown begins

The European Parliament has set a Sunday night deadline for the talks since it still will have to approve any deal before December 31, when a transition period following Britain's January 31 withdrawal from the EU will expire.

“It's the moment of truth," Barnier said. “We have very little time remaining, just a few hours."

Fishing remained the stumbling bloc on Friday, several diplomats said, with the two sides in wide disagreement over the phase-out period during which the UK would progressively bar EU boats from its waters and how big a catch EU trawlers would be able to hang on to.

A failure to reach a post-Brexit deal would lead to more chaos on the borders at the start of 2021 as new tariffs would add to other impediments to trade enacted by both sides. The talks have bogged down on two main issues over the past days, the EU’s access to UK fishing waters and assurances of fair competition between businesses.

Johnson has made fisheries and UK control over its waters a key demand in the long saga of Britain’s departure from the EU.

Barnier said the EU understood and respected the UK's desire to rule its own waves, but said that “a credible period of adjustment” had to be given, if EU boats are to be kicked out of British waters despite centuries of tradition of sharing them.

On top of that, the more London denies access to its waters, the more the EU can impose duties and tariffs.

While both sides would suffer economically from a failure to secure a trade deal, most economists think the British economy would take a greater hit, at least in the near-term, as it is relatively more reliant on trade with the EU than vice versa.

Both sides have said they would try to mitigate the impact of a no-deal scenario, but most experts think that whatever short-term measures are put in place, the disruptions to trade will be immense.

READ MORE: EU: Brexit deal with Britain is possible