Brexit deal 'very close' as EU ready to offer 'super-charged' trade agreement
According to Bloomberg the European Union is ready to offer the UK a free-trade deal deeper than any previous proposal but will not meet Theresa May’s demand for a “frictionless trade”.
The EU’s plan will contain “30-40% of May’s proposal” regarding trade and a security deal, said Bloomberg’s sources.
The offer will be a non-binding declaration part of the Brexit deal that officials are iming to secure by mid-November. It would offer the U.K. an unprecedented “super-charged” free-trade agreement, said one of the diplomats speaking to the media outlet.
Although the EU's plan does not contain "frictionless border trade" it "will make it even more important that the so-called Irish backstop is acceptable to the UK government and its Northern Irish allies" and be closer to the Candian-style deal that leading Brexit supporters are keen on.
Nevertheless talks are moving forward with both sides cooperating and willing to give in to some of the other’s requests. According to the Times, UK negotiators proposed a new option to avoid a hard Irish border that would involve the whole of the UK remaining in the customs union with the bloc until a permanent solution is found.
One EU source said the UK was taking a “step in the right direction” which would make it easier to find a compromise and added a deal was "very close".
Ireland’s Prime Minister Leo Varadkar, who was in Brussels on Thursday for talks with European Council President Donald Tusk and chief Brexit negotiator Michel Barnier, said the new British proposals would be acceptable but some details needed to be specified.
“There would be constraints. A lot of countries would take the view that any UK-wide arrangement is really a matter for future relations rather than a backstop, which is about Ireland and Northern Ireland,” he said.
The news comes after Donald Tusk criticised on Thursday what he deemed "insulting" comments from British Foreign Secretary Jeremy Hunt, who said the EU’s negotiating stance on Brexit was similar to the Soviet Union’s refusal to let states secede. He also urged London to accept a Brexit deal that would keep the UK more aligned with the bloc.
Nevertheless, Tusk said the EU would still offer the UK a “Canada-plus-plus-plus deal” – a far-reaching trade agreement with extra accords on security and foreign policy.
Varadkar said he did not know "what Canada-plus-plus-plus means, it is just a concept at this stage”, adding the negotiations would still need a “legally binding backstop” to avoid a hard border on the island of Ireland if there is no agreement on the future trading relationship.
Following the news sterling rose to a 10-week high of 88.19p against the euro. The pound also hit a five-day high against the dollar of $1.3053.
CMC Markets analyst David Madden said on Friday: "The pound has been helped by the slide in the US dollar and the cautious optimism surrounding the Brexit talks. Dealers are a little hopeful that as deal can be done regarding Brexit, and yesterday we heard that Theresa May was considering an all-UK customs union with the EU, and that could solve the issue of the Irish broader. If the pound can hold above the 1.3000 mark it could look to retest the September high."