EU and UK negotiators are set showdown Brexit talks this week as they seek to build on tentative signs of progress which have raised hopes that a trade deal may be possible.
Teams will meet on Tuesday for three days of talks at the European Commission’s headquarters in Brussels, with a month remaining until what EU chief negotiator Michel Barnier has said is the “realistic deadline” for a deal, if it is to be ratified in time for the end of Britain’s transition period on January 1.
EU diplomats told the Financial Times that what was at stake this week was whether enough headway could be made to justify both sides then entering into intensive “tunnel” talks of senior advisers, who would have the task of resolving the most difficult issues left on the table.
The tunnel, also described by Mr Barnier as “submarine” talks, could run from the week of October 4 until an EU summit on October 15-16, a date seen as the moment when leaders such as France’s Emmanuel Macron and Germany’s Angela Merkel will assess the state of the negotiations.
David Frost, the UK’s chief negotiator, said a deal was “very much possible, but equally very far from certain”, adding that the past fortnight of informal discussions had been “relatively positive”.
“The EU still needs to scale back more of its unrealistic ambitions and work on more realistic policy positions”, he said. “I hope this will be possible this coming week, and I and my team are ready to work as hard as necessary to move things forward.”
Government officials said Boris Johnson, UK prime minister, was eager for an agreement — urged on by fears from Cabinet Office minister Michael Gove about the chaos of a no-deal outcome and chancellor Rishi Sunak’s concerns about the impact on the economy.
“Boris very much wants a deal, but not at any price,” said one Whitehall official. Another official warned that there were still “fundamental differences” and “it could go either way”.
EU diplomats cautioned that the two sides had yet to identify landing zones on the two most difficult sticking points in the trade talks: the EU’s future fishing rights in British waters, and the bloc’s demands for a “level playing field” between British and European companies, especially in the area of state aid.
Officials said this week’s talks would establish whether signs of flexibility in recent contacts between the EU and the UK, including during informal talks last week between Mr Barnier and Lord Frost, could turn into real movement.
The two sides have discussed the idea that a solution on fish could include a “phase out” process by which EU catching rights in UK waters would decline over a period of years.
But officials from EU fishing nations cautioned that the two sides remained far apart and that there were limits to what their governments would accept.
Particular problems include the UK wanting long-term fishing rights to be divided up based primarily on a system called “zonal attachment” that would drastically cut the European catch compared to the status quo.
“It’s hard to imagine any compromise based on zonal attachment,” said one diplomat. “Fishing communities would probably sooner opt for no-deal.”
On state aid, Brussels is seeking to work around Britain’s reluctance to spell out in detail the country’s post-Brexit state-aid regime by proposing to write principles directly into the trade deal.
“The real question is can this round provide enough progress across the board, including on the most contentious files, to allow the intensive work of the final stretch to properly begin,” said one EU official. This week’s talks are the last scheduled formal round of negotiations — the ninth since the process began in March.
The talks are going ahead despite disagreement between the EU and the UK over Mr Johnson’s planned internal market bill, which would allow the country to override last year’s Brexit treaty, notably the delicate compromise it contains on Northern Ireland.
Brussels has threatened the UK with legal action if the government does not withdraw the offending parts of the bill by the end of September. Maros Sefcovic, the EU commissioner in charge of monitoring the implementation of the treaty, will hold talks with his British counterpart Mr Gove in Brussels on Monday.