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Brussels confident post-Brexit trade deal is increasingly likely

Two sides closer than ever on the substance despite London’s stance that ‘talks are over’

Michel Barnier: European Union’s chief negotiator faces a difficult challenge in balancing the need for compromise with the determination of EU leaders not to give Britain an unfair competitive advantage. Photograph: Yves Herman/AFP /Getty Images)

Britain’s declaration that its trade talks with the European Union were over was met with bewilderment in Brussels, not least because a deal is closer than ever before. In terms of substance, the negotiations are in a better position from Britain’s point of view than they were before this week’s summit.

After a succession of difficult negotiations on fisheries between Michel Barnier and the EU’s coastal states, French president Emmanuel Macron conceded for the first time that his country’s fishermen would lose some of their access to British waters.

“Will the situation be the same as today? No, for sure, our fishermen know it, we know and we will be at their side. Can we accept a Brexit that sacrifices our fishermen? No, equally not,” he said.

“It will doubtless be with conditions, perhaps with a fee. But it must be long-term because we must give each other visibility.”

On the level playing field guarantees of fair competition, Downing Street knows that Michel Barnier is preparing to make a fresh compromise offer next week. The two sides have made progress on state aid or subsidy policy as Britain has begun to engage more seriously on the terms of reference of its domestic regulator.

EU leaders were adamant during the summit that Britain’s level playing field guarantees must be robust and enforceable so Barnier’s room for manoeuvre is limited. And he is still resisting British chief negotiator David Frost’s demand that the two sides should start negotiating the legal text of an agreement before a clear landing zone has been identified.

Although Downing Street ramped up the rhetoric with its declaration that the trade talks were over, Johnson’s own statement left the door open to further talks. Frost’s rejection of Barnier’s offer of talks in London next Monday is less dramatic than it appears because no talks were actually scheduled and Barnier made his offer in a letter on Friday morning.

The two men have agreed to talk next week but the EU side may have to make a public gesture to satisfy Johnson’s honour so that negotiations can resume. Time is running out and real obstacles remain in the way of an agreement.

The Downing Street team in charge of the negotiations, including Frost, are inexperienced and prone to serious lapses of judgment, as in the treaty-breaking Internal Market Bill. And Barnier faces a difficult challenge in balancing the need for compromise with the determination of EU leaders not to give Britain an unfair competitive advantage.

But beyond the rhetoric and the operatic displays in Downing Street, the two sides are closer on the substance than ever before and a deal remains the most likely outcome.

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