(Bloomberg) -- U.K. and European Union negotiators are locked in talks in Brussels over the final details of a historic post-Brexit trade accord, with both sides engaged in last-minute haggling over fishing rights.
While the outline terms of the deal, including broad fishing quotas, were agreed on Wednesday, negotiators have hit a last-minute disagreement over the precise number of each species EU boats will be able to catch in U.K. waters, officials said. It isn’t clear how long it will now take for the discussions to reach a conclusion.
In a sign the deal may only emerge late on Christmas Eve, EU ambassadors, who are required to scrutinize any agreement after it is made public, were stood down on Thursday afternoon and told to make themselves available over the holiday period.
The accord, which will formally complete Britain’s separation from the bloc four-and-a-half years after the 2016 referendum, will allow for tariff and quota-free trade in goods and cooperation in areas from security to aviation.
The U.K. cabinet held a conference call on the state of the negotiations late on Wednesday while European governments were briefed by officials from Brussels. The final document, running to about 2,000 pages, would still need to be approved by Johnson and EU governments, as well as parliaments on both sides.
Johnson and European Commission President Ursula von der Leyen intervened personally in recent days, holding several phone conversations, in a last-ditch bid to reach an agreement before the U.K. leaves the single market at the end of the month.
One EU diplomat said the U.K. had made concessions on fisheries in recent hours that had unlocked the deal. According to two people familiar with the matter, Johnson has accepted that the bloc’s share of the catch in U.K. waters should fall by 25% over a period of five-and-a-half years. Britain had initially sought an 80% reduction over just three years, but in recent days had offered a cut of 30%.
The bloc had refused to accept a reduction of more than 25% in the value of fish caught, saying even that was hard for countries like France and Denmark to accept, according to officials with knowledge of the discussions.
This would be phased in over five and a half years. The U.K. previously offered three years while the EU were pushing for 10.
The pound rose 0.5% to $1.3560, though was still short of the two-and-a-half year high of $1.3624 reached last week.
If the two sides can finalize the deal off, it would draw a line under almost five years of often tempestuous negotiations since the U.K. voted to withdraw from the EU in 2016 and lay the foundations for Britain to trade and collaborate with the bloc going forward.
As the Brexit endgame was drawing to a close, the emergence of a new strain of the coronavirus forced large parts of England into lockdown. Hundreds of trucks backed up around the southern English port of Dover in a sobering reminder of the potential consequences of ending Britain’s transition period on Dec. 31 without a deal.
Both sides have made an agreement on fishing a precondition for any wider deal over their future relationship, even if the 650 million euros ($790 million) of fish European boats catch in U.K. waters each year is a fraction of the 512 billion euros of goods traded annually between Britain and the EU.
The EU also wants to be able to impose tariffs on the U.K. if, after the fisheries transition period, the government restricts access to its waters. In its latest compromise offer, the U.K. said it would accept tariffs on fisheries but not in other areas, such as on energy, as demanded by the bloc.
(Adds ambassadors being stood down in third paragraph.)
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