BRUSSELS (AP) -- Negotiators from the European Union and Britain worked through the night and into Christmas Eve to put the finishing touches on a trade deal that should avert a chaotic economic break between the two sides next week.
Trade will change regardless come Jan. 1, when the U.K. leaves the bloc's single market and customs union. But both sides have been working furiously to avoid a nightmare scenario, in which the imposition of tariffs and duties would cost billions in trade and hundreds of thousands of jobs and potentially so snarl ports that many goods would struggle to get through. That possibility was starkly illustrated this week when a brief French blockade of British trucks over coronavirus concerns created chaos at ports that is still being sorted out.
After resolving nearly all of the remaining sticking points, negotiators combed through hundreds of pages of legal text Thursday that should become the blueprint for a post-Brexit relationship.
As during much of the nine-month negotiations, the issue of EU fishing fleets in British waters proved the most intractable and divisive, with negotiators still haggling over quotas for some individual species as dawn came and went.
Still, sources on both sides said the long and difficult negotiations were on the cusp of being wrapped up as negotiators, holed up at EU headquarters in Brussels with a stack of pizzas, worked to deliver the text to their leaders on Thursday.
Irish foreign affairs minister Simon Coveney said there appeared to be “some sort of last-minute hitch” over fish, but that it was not surprising. He said he expected announcements of a deal from London and Brussels “later on today.”
The agreement would then go to the 27 EU nations seeking unanimous approval, as well as the blessing of the EU and British parliaments. It's expected to get those approvals.
Britain's currency, the pound, rose on expectations of a deal, up 0.5% against the dollar to just under $1.36.
It has been 4 1/2 years since Britons voted 52%-48% to leave the EU in order to — in the words of the Brexiteers' campaign slogan — “take back control” of the U.K.'s borders and laws.
It took more than three years of wrangling before Britain left the bloc's political structures on Jan. 31. Negotiating how to disentangle economies that were closely entwined as part of the EU's single market for goods and services took even longer.
Despite the apparent breakthrough, key aspects of the future relationship between the 27-nation bloc and its former member remain uncertain. But it leaves the mutually dependent, often fractious U.K.-EU relationship — and its 675 billion pounds ($918 billion) in annual trade — on a much more solid footing than a disruptive no-deal split.
If a deal is announced, British Prime Minister Boris Johnson will be able to claim to have delivered on the promise that won him a resounding election victory a year ago: “Get Brexit Done.”
Even with a deal, trade between Britain and the EU will face customs checks and other barriers on Jan. 1. But an agreement would avert the more disastrous effects of tariffs and duties. Britain withdrew from the EU on Jan. 31, and an economic transition period expires on Dec. 31.
Johnson has always insisted the U.K. will “prosper mightily” even if no deal is reached and the U.K. has to trade with the EU on World Trade Organization terms from Jan. 1.
But his government has acknowledged that a chaotic exit is likely to bring gridlock at Britain's ports, temporary shortages of some goods and price increases for staple foods. Tariffs will be applied to many U.K. exports, including 10% on cars and more than 40% on lamb, battering the U.K. economy as it struggles to rebound from the impact of the coronavirus pandemic.
Over the past few days, Johnson and EU Commission President Ursula von der Leyen have been drawn more and more into the talks, speaking by phone in a bid to unblock negotiations that have dragged on for months, hampered by the pandemic and by the two sides' opposing views of what Brexit entails.
Rumors of a pre-Christmas trade deal surfaced in recent days based on progress on the main outstanding issues: fair competition, resolution of future disputes and fishing.
The EU has long feared that Britain would undercut the bloc's social, environmental and state aid rules to be able to gain an unfair edge with its exports to the EU. Britain has said that having to meet EU rules would undercut its sovereignty.
Compromise was finally reached on those “level playing field” issues, leaving the economically minor but hugely symbolic issue of fish to be the final sticking point. Maritime EU nations are seeking to retain access to U.K. waters where they have long fished, but Britain has been insisting it must exercise control as an “independent coastal state.”
A huge gap between the two sides on fishing was gradually narrowed until it appeared, at last, bridgeable.
Johnson's large Conservative majority in Parliament should ensure that the Brexit trade agreement passes, but any compromises will be criticized by hardline Brexit supporters in his party. The party's euroskeptic European Research Group said it would carefully scrutinize any deal “to ensure that its provisions genuinely protect the sovereignty of the United Kingdom after we exit the transition period at the end of this year.”
The European Parliament has warned it's now too late for it to approve the deal before Jan. 1, but an agreement could provisionally be put in place and approved by EU legislators in January.
Businesses on both sides are clamoring for a deal that would save tens of billions in costs.
While both sides would suffer economically from a failure to secure a trade deal, most economists think Britain would take a greater hit, because it is smaller and more reliant on trade with the EU than the other way around.