Investor Alert

Dec. 5, 2020, 8:55 a.m. EST

Could a U.K.-EU trade deal be in sight, after 10 months of fruitless negotiations?

Pierre Briançon

European Union and U.K. officials quoted by Reuters said on Thursday that a treaty regulating the two sides’ future trade relationship could be agreed before the weekend. But hard-liners in both camps reiterated longstanding views that the absence of a deal would be preferable to an agreement ignoring their red lines.

• EU and U.K. negotiators entered the last possible days to strike an agreement, before an EU summit next week that could green light the deal and open the way for parliaments to ratify it before the end of the year.

• Ireland’s foreign-affairs minister, Simon Coveney, told Newstalk radio that he thought “there’s a good chance that we can get a deal across the line in the next few days.”

• Coveney was echoed by the U.K.’s education secretary, Gavin Williamson: “I’m confident from what I hear that progress, good progress is being made,” he told Sky News .

• According to several media reports , EU negotiator Michel Barnier, in a session with EU ambassadors, urged the most hard-line governments , which include France and the Netherlands, to accept some compromise on the matter of fishing rights in British waters, or face the risk of the talks’ failure.

• French President Emmanuel Macron reiterated earlier this week that “France will not accept a Brexit deal that does not respect [its] long-term interests.”

• The U.K. left the EU on Jan. 31 but has remained since then subjected to the EU’s rules and regulations in a “transition period” that expires on Dec. 31.

Read: Britain is unprepared for real Brexit: official reports

The outlook: As expected, the talks are going to the wire, and negotiators have just another week to strike a deal. Lassitude can be expected from all parties after 10 months of fruitless negotiations. But the current coronavirus-induced recession may help sober up minds on the economic risks of a “no deal” Brexit.

Rumors that some differences have begun to split the European side, with proponents of a tough line worried that Barnier is conceding too much to the U.K., may be part of the negotiating game, intended to show London that now is really the time to sign a deal. But even in the last days, more saber rattling, shadow boxing and foot trampling can safely be predicted.

Read: Here’s why cod and haddock threaten to scuttle trade talks as both EU and U.K. send Brexit warnings

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