A senior UK minister said Tuesday there was still the possibility of a tumultuous, no-trade Brexit as talks with the European Union over fisheries, governance rules and dispute settlement stalled.
Just 30 days before the UK exits EU orbit after a period of transition since it officially exited the bloc, the sides are trying to reach a trade deal to avoid a break that will hurt nearly $ 1 trillion in annual trade could.
As each side asked the other to compromise, a French official said the UK needed to clarify its positions and “really negotiate” and warned that the EU would not accept an “inferior deal”.
Michael Gove, Chancellor of the Duchy of Lancaster, the cabinet minister overseeing the Brexit talks for London, said a deal was near, but to get it across the line, the EU must live up to its responsibilities.
When asked if a ‘no deal’ scenario was closer than anyone would admit, he told ITV: ‘It is certainly the case that there is a possibility that we will not get a negotiation result.’
“So it’s important that business prepare for any eventuality, but I really want a deal and I believe we can get one,” said Gove.
Gove avoided repeating an earlier prediction of a 66% chance of a deal and declined to give a number.
The pound rose above $ 1.34 for the first time in three months on Tuesday, indicating that investors remained bullish that a Brexit deal would be closed.
While most of the major investment banks say a deal is their key prediction, some investors have pointed out that Wall Street and the City of London were poorly prepared for the 2016 referendum, as few believed the UK would vote.
If no agreement is reached, borders will be confused, financial markets terrified, and delicate supply chains across Europe and beyond disrupted – just as the world is grappling with the huge economic costs of the COVID-19 outbreak.
“IN THE FINAL GAME”
Prime Minister Boris Johnson, under pressure from his party’s opponents who dislike strict COVID lockdowns, says a deal is preferable but the UK could thrive without one. Both sides have contingency plans for a no-deal exit.
Even with a trade deal in place, it is likely just a tight deal in goods and some disruption is certain as border controls are put in place between Britain, the world‘s largest trading bloc.
The UK’s Bureau of Budgetary Responsibility said last week that failure to reach a free trade deal would cut UK economic output by an additional 2% – on top of the 4% decrease if the bloc left with a deal – and inflation at the same time That would boost unemployment and public lending.
Talks have stalled about fishing in the UK’s rich waters, the EU trade rules that London will accept and how disputes could be resolved.
“The EU still wants to take over the lion’s share of the fishing industry in our waters – which is just not fair in view of the exit from the EU,” Gove told Sky.
A trade deal would not only secure trade but also strengthen peace in Great Britain-ruled Northern Ireland.
Chancellor Angela Merkel, Europe’s most powerful head of state, said some of the EU’s 27 member states were getting impatient.
Irish Prime Minister Micheal Martin said a deal could be struck this week.
“There’s a landing area for an agreement,” Martin told the Irish Times. “We are really in the final now if a deal is to be struck this week.”
(Except for the headline, this story was not edited by GossipMantri staff and published from a syndicated feed.)