European Union and British negotiators are nearing a trade deal as Britain’s New Year’s Day exit from the 27-nation bloc approaches, EU officials said Wednesday.
Two officials said negotiators are working to resolve as early as midnight Wednesday a fishing rights issue in British waters in hopes of avoiding a messy economic break between the two sides.
One of the sources, who asked to remain unidentified because the talks were still ongoing, said talks had entered the final phase.
“I expect to see some white smoke tonight,” the official said.
Since formally leaving the EU on January 31, Britain immediately entered an 11-month economic transition period, giving negotiators time to reach a free trade deal to ease its exit from the Single Market and the Customs Union at the end of this year.
Negotiators are attempting to reach a deal that ensures the annual trade of goods between the two sides worth nearly $1 trillion remains exempt from tariffs and quotas.
Britain is calling for quotas for EU vessels in British waters, and sources from both sides have reported progress in the talks.
An EU diplomat said negotiators previously reached a compromise over EU concerns that Britain would weaken the bloc’s social, environmental and state aid rules to gain an unfair advantage with its exports to the EU. Britain maintained that EU rules would have undercut its sovereignty.
It is unclear how trade between the two sides would take place if they fail to meet the January 1 deadline.
