Post-Brexit trade talks in 'very difficult position', Cabinet minister says

Video report by ITV News Political Correspondent Romilly Weeks

Talks on a post-Brexit trade deal with the EU are in a “very difficult position” and are entering the “final few days” which will determine whether there can be an agreement, the environment secretary has said.

Speaking on Sunday morning, just hours before British and EU negotiators resumed talks in Brussels in a “final throw of the dice”, George Eustice did hint that there would be a further extension to finalise the details if the “fundamental divergences” which existed could be overcome.

With time rapidly running out before the Brexit transition period concludes at the end of the month, Lord Frost and Michel Barnier will meet in a last-ditch attempt to resolve the remaining issues.

Arriving in Brussels on Sunday morning, the UK's chief negotiator David Frost said: "We will be looking forward to meeting our European colleagues later on this afternoon," adding: "We will be working very hard to get a deal."

Their return to the negotiating table follows an hour-long call on Saturday between Boris Johnson and European Commission president Ursula von der Leyen, in which they agreed on a final push to get an agreement.

Post-Brexit trade talks are in 'very difficult position', Environment Secretary George Eustice has said. Credit: PA

While in the past much of the focus has been on the differences over fisheries, British sources indicated they would be looking particularly at the so-called “level playing field” rules on issues like state aid for business.

The "level playing field" is a trade-policy term for a set of common rules and standards that prevent businesses in one country gaining a competitive advantage over those operating in other countries - this would mean the UK would have to abide by certain EU rules post-Brexit.

While the two sides have been circling round the key issues for months, it was unclear from the statement whether either – or both – of the two leaders had been prepared to shift ground in a way that would enable them to bridge the gaps.

On the UK side there was continuing anger at what were being described as the EU’s “unprecedented and last-minute demands” which, it was said, would have tied Britain to EU regulations “in perpetuity”.

There were accusations that the EU was pursuing an “unrealistic” negotiating mandate and that the talks had got as far as they could without high level political intervention.

Ahead of the meeting between Lord Frost and Mr Barnier however, British sources warned there was no guarantee they would succeed.

“This is the final throw of the dice,” said one UK source close to the negotiations.

“There is a fair deal to be done that works for both sides, but this will only happen if the EU is willing to respect the fundamental principles of sovereignty and control.”

As talks resumed in Brussels, Mr Eustice accused the EU of introducing “a whole load of additional demands” late in the negotiations, particularly "ludicrous" ones over future fishing rights.

Mr Eustice said the UK was prepared to offer a multi-annual deal of up to three years but that the EU was insisting on access to British waters for its fishermen “in perpetuity”.

ITV News Political Correspondent Romilly Weeks says post-Brexit trade talks are "entering the last chance saloon" but many UK businesses will be watching them "anxiously" with hopes of a deal

“The EU have suggested a very modest increase that they would tolerate the UK having of the fish in its own waters, but given that we only have half of the fish in our own waters now that simply wouldn’t be possible,” he told Sky News’s Sophy Ridge On Sunday programme.

“There is also the more important principle that you would not be able to give any guarantees for the long-term, otherwise you are effectively guaranteed access in perpetuity to our waters which is just not right under international law.

“We would be the only country in the entire world that could agree that, so such a suggestion really is quite ludicrous and not consistent with international law.”

Fishing is one of the major sticking points in Brexit negotiations. Credit: PA

He continued that the talks are "in a very difficult position – there is no point denying that,” he told the political programme.

“There was some hope early last week, some progress was being made, and at one point it looked like there might be a breakthrough but then the European Union added a whole load of additional demands after that which caused some problems.

“We will continue to work on these negotiations until there is no point doing so any further but there is no point denying that what happened late last week was a setback.

Speaking to ITV News, Mr Eustice said the negotiations were entering the final few days but hinted that there would be a further extension to finalise the details if the fundamental divergences which existed could be overcome.

"The next 72 hours is going to be quite crucial to see whether they can get a breakthrough on these difficult sticking points," he said.

"Of course, if there's a sort of heads of terms approach and understanding about where we can land this, you can always find a few more days to keep negotiating, but if it's not possible in the new few days to crack some of these difficult issues it seem to look unlikely that there will be a negotiated outcome."

Speaking on the BBC's The Andrew Marr Show, Mr Eustice also admitted there will be “some impact” on food prices if the UK fails to get a trade deal with the EU, but insisted it would be "quite modest – less than 2% as a result of tariffs".

“It would be higher on some things such as beef and pork but those make up a relatively small proportion of the overall family shop,” he added.

Boris Johnson and Ursula von der Leyen spoke for over an hour on Saturday. Credit: PA

Irish premier Micheal Martin said it is very important that “common sense prevails” and that a post-Brexit trade deal is reached. The Taoiseach said: “I think the situation is serious and the three issues that prove very difficult to reconcile all the way through the talks are still there to be dealt with. “Namely, the level field, which is proving particularly difficult, fisheries and of course the dispute resolution mechanism to deal with the level playing field issue. “My sense is that we are at a very difficult juncture and it’s important that the Zoom talks use every piece of creativity they can, that the participants try and get a resolution, because a no-deal would be very damaging to all concerned, to the United Kingdom, to the Irish economy and indeed to the economies of member states as well. “It’s very, very important that common sense prevails here and that a deal is done. “A message to the Irish people and the Irish businesses is to be very alert and vigilant in your preparations for Brexit, double down and check again that all of your preparations are in place, because even with a deal it will be challenging in terms of the changes that will occur and the additional documentation.”

Also on Sunday, shadow Cabinet Office minister Rachel Reeves said Mr Johnson should “get on and deliver” on his promises of a Brexit deal to enable the country to “move on”.

Speaking on The Andrew Marr Show, Ms Reeves said: “Government sources overnight are saying it’s the last throw of the dice – I just say to the prime minister, this is not a game of snakes and ladders.

“This is about people’s jobs, about people’s livelihoods, the government has got to deliver on the promises they have made and we will hold them to it.”

Ms Reeves also appeared to indicate Labour would vote for a Brexit deal.

"At the moment the priority is to get a deal but we’ll have to look at the content of a deal but also any legislation that comes to Parliament," she said.

“We’re not going to give them a blank cheque but I think I have been very clear both today and on previous programmes with you, Andrew, that the most important thing is the government gets a deal.”

However, Brexit Party leader Nigel Farage expressed concern that they were moving towards yet another extension of Britain’s period under EU rules.

“I do hope that this lack of an agreement does not mean we are heading for an extension,” he tweeted.

“After four and a half years, Brexit voters won’t tolerate that.”

Speaking on BBC Breakfast on Sunday, Theresa May’s former chief of staff Lord Gavin Barwell said he believes a deal on a post-Brexit trade agreement is “definitely still possible”, although it will rely on whether or not both sides are “prepared to make the compromises necessary”.

If there is no agreement, the UK will leave the European single market and customs union on December 31 and begin trading with the bloc on World Trade Organization terms, with the imposition of tariffs and quotas.

EU leaders are due to meet on Thursday for a two-day summit in Brussels – their last scheduled gathering of the year – when they could sign-off on any agreement.

Any Brexit deal must be ratified by the leaders of all 27 EU member states.

Anti-Brexit protesters outside the BEIS Conference Centre in central London, where post-Brexit trade deal talks are taking place Credit: Aaron Chown/PA

Time then has to be found for both Houses of Parliament in the UK and the European parliament to ratify it before the transition period expires – although there have been suggestions that could slip in the EU side.

In a further complicating factor, the UK government is bringing back to the Commons legislation enabling it to override elements of Mr Johnson’s “divorce” settlement with Brussels in breach of international law.

On Monday, MPs will vote on whether to overturn amendments by the House of Lords which removed the provisions in the UK Internal Market Bill relating to the Irish border.

MPs will then go on later in the week to consider the Taxation (Post-Transition Period) Bill which contains further similar provisions.

The legislation has infuriated the EU and – if it is passed – could further sour the mood in the negotiations making a deal harder to reach.