Boris Johnson is now on his way to Brussels to hold Brexit trade talks with EU leader Ursula von der Leyen this evening.
The Prime Minister was seen leaving 10 Downing Street in the late afternoon and is now flying to the Belgian capital at 7 p.m. for a crunch dinner with the President of the European Commission.
The couple will seek to breathe new life into the trade discussions after formal negotiations between the UK and the bloc stall over disagreements over fishing rights and the so-called "level playing field" for rules.
Mr Johnson set the stage for a tense showdown with Mrs von der Leyen after warning at lunchtime that no prime minister could accept the EU's demands to keep its rules in the future.
At the PMQs, Mr Johnson insisted that despite the increasingly bitter stalemate, there was still much to be done.
However, he made it clear that there must be movement on the EU side if a trade agreement is to be agreed and implemented before the “deadlock” transition period ends on December 31st.
"Our friends in the EU are currently insisting that they have the automatic right to punish us and take revenge if they pass a new law in the future that we do not comply with or that we do not follow in this country." Johnson told MPs.
Second, they say Britain should be the only country in the world that does not have sovereign control over its fishing waters.
"I don't think these are conditions that every prime minister in this country should accept."
In an upbeat upbeat performance, Mr Johnson said the UK would "thrive mightily" with or without an agreement.
Tory MPs urged Mr Johnson to hold onto his guns and insisted that his promise to regain control and put sovereignty first must not be sacrificed in order to get a deal.
But Sir Keir Starmer accused the prime minister of botched negotiations and swiped: "Secure the deal, prime minister. You promised. & # 39;
Downing Street has tried to downplay expectations for the showdown that evening, insisting that it will not be a negotiation and suggesting that the best outcome would be a "political impetus" that could allow the two negotiating teams to stand up to engage again.
Boris Johnson was pictured leaving 10 Downing Street this afternoon as he drove to Brussels to hold trade talks this evening
The prime minister will fly to the Belgian capital to have dinner with Ursula von der Leyen in order to start deadlocked trade negotiations
Today's dinner in Brussels may be seen as the last point where trade talks can be saved
Cabinet Secretary Michael Gove (pictured in Whitehall yesterday) has warned Mr Johnson could end negotiations unless the bloc moves on the sticking points of fishing rights, level playing field and enforcement
What are the sticking points in the Brexit talks?
The UK has insisted that it regain control of its coastal waters from the end of the transition period.
However, the EU called for its fleets to maintain their previous access levels – with Emmanuel Macron under particular pressure from the French fishing industry.
First, the UK said it would reclaim 80 percent of EU quotas from January 1.
However, Brussels suggested restoring just 18 percent.
The two sides are believed to be near a "landing zone" that has a transition period of perhaps five or seven years. However, there is still no agreement.
LEVEL PLAY FIELD
The EU has insisted that the UK commit to a level playing field rules to ensure that companies with lower environmental standards and regulations are not undercut.
State aid has emerged as a particular problem, especially as the coronavirus is making parts of the economy unprofitable.
However, the UK says it needs to regain sovereign powers to make rules, even though it has no plans to lower standards or distort competition by subsidizing the private sector.
It appeared that this area was close to being resolved last week before France reportedly put a number of additional conditions in place, including huge penalties for breaking the rules.
While the UK is happy with the "non-regression" – which means that current standards are accepted as a basis – it has rejected calls for future compliance with the bloc's rules.
Getting a deal done and who decides whether to break rules has been a focus from the start.
The exemption from the European Court of Justice was one of the Brexiter's greatest demands from the referendum.
However, the EU has tried to maintain control of governance and insist on harsh fines and punitive tariffs for violations.
The situation was inflamed by the dispute over the UK's Single Market Act, which gives ministers the power to override the previous Brexit divorce terms to prevent deadlocks between the UK and Northern Ireland.
Critics say this demonstrated why enforcement mechanisms need to be effective – which is why ministers felt it was important to resolve the problem.
Earlier, Cabinet Minister Michael Gove warned that if the EU does not postpone the sticking points of the fishing rights, level playing field and enforcement of the agreement, Mr Johnson could end negotiations.
He suggested that the "glide path" had been eased by resolving another major dispute over the implementation of the original Brexit divorce terms.
But he insisted Britain will never bow to pressure over future rules and regulations – proposals that resurfaced dramatically last week after a renewed offensive by Michel Barnier and French President Emmanuel Macron.
Mr. Gove said the Prime Minister would later explain the "political realities" with Ms. von der Leyen.
As the pressure increased yesterday, Mr Barnier – who increasingly appeared to be an obstacle to an agreement – warned that the chances of a deal were "very slim".
Mr Johnson yesterday offered a significant olive branch by agreeing to scrap controversial laws that broke part of the original Brexit deal related to Northern Ireland.
The EU had announced that it would not sign an agreement if the legislation was retained.
Another major concession will allow the EU to deploy civil servants in Northern Ireland, a sticking point the UK had previously stuck to.
The DUP called it "unnecessary" and "worrying" while Brexiteers made it clear that they will be watching closely whether Mr Johnson steps out more ground to Ms. von der Leyen.
Government sources, however, said large gaps remained between the two sides on key issues – warning that the prime minister could end negotiations if no progress was made.
According to one source, the two sides were too far apart for an agreement to be reached tonight. However, Mr Johnson hopes the two leaders can identify a breakthrough that their negotiators can complete in the days to come.
"The goal is to unlock things so they can empower their teams to move on and solve the problems," the source said.
"But if they strike and make no progress, then that will be it – there is no point in going on."
Chancellor Angela Merkel said she doesn't think it will be clear tonight whether a deal will come about.
"I don't think we'll know by tomorrow whether this will happen or not. At least I can't promise that, but we're still working on it," she told the Bundestag.
“But we are also prepared for conditions that we cannot accept. So if there are terms from the UK that we cannot accept, we will go our own way without an exit agreement. Because one thing is certain: the integrity of the internal market must be preserved. & # 39;
Ms. Merkel said the "big, tough question" was about the rules for compliance with future regulations. The EU fears that if the UK refuses to follow its standards, it will gain a competitive advantage.
"There are a number of complicated questions, mostly due to the handling of the dynamics," she said.
“We currently have more or less the same legal system, a harmonized legal system, but over the years legal systems will differ everywhere in terms of environmental law, labor law and health legislation.
Brexit on the menu: the plan for dinner
The place for the decisive meeting between Boris Johnson and Ursula von der Leyen will be the Berlaymont headquarters of the EU Commission.
In part, this is intended to help avoid prying eyes – but Brussels is also almost completely closed due to the corona virus, as restaurants are closed.
Mr Johnson will fly to the Belgian capital to avoid the Eurostar coming into contact with reduced services and disruptions.
Negotiators Michel Barnier and Lord Frost and several other important officials are seated at the table with the Prime Minister and Mrs von der Leyen at 7 p.m. UK time.
The menu has yet to be announced but is always closely watched for clues about the host's mood and subtle jokes.
Since fishing rights are one of the core issues that need to be resolved, it would not be a surprise if something related to it is served.
“And how will the other side react if the legal situation in the European Union or in Great Britain changes? And we cannot just say that we will not talk about it, we need not only a level playing field for today but also for the days to come.
“To do this, we have to make agreements on how each side can react if the other changes its legal situation. Otherwise there will be unfair competitive conditions that we cannot do to our companies. & # 39;
In a round of interviews this morning, Mr. Gove refused to give a percentage chance of a deal.
"I am confident that the Prime Minister will be able to determine where exercise is required during dinner," he told Sky News.
"I hope that today's conversation between the Prime Minister and the President will provide further political impetus to ensure that we can reach an agreement."
Mr Gove insisted that the UK “hold the cards” in the talks with fishing rights and as the main buyer of EU goods. That's why the bloc tried to regain the advantage over the past week, he argued.
"I think the political realities he will share with Ursula von der Leyen tonight offer us the best chance of reaching an agreement," added Gove.
He confirmed that the level playing field rules are now the main problem to be overcome.
"The problem with the particular argument is that last week the EU negotiators didn't just want an agreement whereby we promise what we call non-regression – which is common in most trade deals, which means you set the standards at the time of entry – they actually wanted an agreement that would mean that if the EU passed new laws, the UK would have to obey them or the EU would retaliate, ”he told BBC Radio 4's Today program.
"We can accept the non-regression principles that apply to free trade agreements that Canada has actually made, and that's the point we've always made – we want an agreement similar to Canada with the European Union."
Chancellor Angela Merkel said she doesn't think it will be clear tonight whether a deal will come about
Mr Barnier told MEPs this week that today is the final deadline for an agreement as it will have to be signed by the heads of state or government at tomorrow's EU summit
There are fears that French President Emmanuel Macron could use this week's summit to reiterate his opposition to a compromise and dash hopes for a deal
Mr Barnier and his British counterpart Lord Frost will both attend dinner that evening between Mr Johnson and Mrs von der Leyen.
Many at Westminster are unsure whether the Prime Minister's trip to Brussels should be viewed as a good or a bad sign of the opportunities for business.
A cabinet minister said: “None of us really know what is going on. Is he leaving because he thinks there is a chance he can come back victorious with a piece of paper?
“Or does he already know it's probably not a deal and just wants to be seen to do all he can?
& # 39; Anyway, it's entirely his calling. Everyone wants a deal, but no one is pushing them to take it at any cost. It's up to his judgment. & # 39;
There are fears that Mr Macron could use this week's summit to reiterate his opposition to a compromise and effectively demolish hopes for a deal.
Downing Street accused Mr Macron of torpedoing talks last week by pressuring Mr Barnier to tighten his stance just as progress was being made.
Two EU diplomats told the mail that the chances of a Brexit deal were "no longer in Barnier's hands".
Is a Canadian-style pact off the table?
Boris Johnson embarked on a trade agreement with the EU based on Canada earlier this year.
In February, the Prime Minister highlighted the EU's offer to sign either a Norwegian-style single market agreement or a looser Canadian-style agreement, adding: “We have made our choice. We want a comprehensive free trade agreement, similar to that of Canada. & # 39;
The agreement between the EU and Canada, signed in 2016 after seven years of talks, raised tariffs on 98 percent of goods and increased trade quotas. Although goods exported to the EU must meet their standards, Canada is not required to follow the bloc's rules.
EU chief negotiator for Brexit, Michel Barnier, had offered the UK and declared in 2017 that Britain's rejection of the single market and the customs union means that we need to work on a model that comes closer to the deal signed with Canada.
But his mindset changed when EU leaders raised concerns that Britain could become more competitive than its own economies. In February he warned that Britain's “special proximity” to the EU meant that any trade deal would have to be different from that with Canada.
Since then, he has filed claims that would keep the UK forever in the EU's regulatory orbit.
Britain had been asked to seek an agreement like the EU's with Switzerland, but the idea never came up – mainly because the Swiss accept freedom of movement, which the UK does not
Mr Johnson said the situation was "very difficult" but he hoped the "power of sweet sanity" could still reach an agreement in the final days before the end of the Brexit transition this month.
He acknowledged that there may be a point when it is time to stump and accept that a deal is impossible.
Talks have stalled on the difficult issues of access to fisheries and the UK's right to determine its own destiny without having to follow EU post-Brexit rules.
The EU is ready to accept only modest cuts in its fishing quotas and wants them to be phased in over a decade.
Brussels also calls for Great Britain to compete on what is known as a "level playing field" in the future.
Former Conservative leader Iain Duncan Smith said the open questions in negotiations with the European Union were sovereignty, not trade.
He told BBC Radio 4's Today, “I think the problem the Prime Minister is facing right now is that it is no longer a trade deal – a trade deal is in the wings.
"What is at stake here is sovereignty, the question of how far the EU can insist that its courts and rules and regulations apply to the UK later on, and the UK remains trapped in EU orbit without a say . " and that is simply unacceptable to the Prime Minister. & # 39;
Mr Johnson is ready to guarantee that the UK will not lower existing standards in areas such as state aid subsidies, labor rights and the environment, but Brussels now also wants the UK to adopt future EU rules and is asking for the power to Lightning bolts to raise tariffs when we part ways – an idea that No. 10 says is unacceptable.
Mr Johnson said yesterday: “Our friends just need to understand that the UK has left the EU in order to exercise democratic control over the way we work.
“There is also the issue of fishing, where we are still a long way apart. But hope is eternal, I'll do my best to sort this out if we can. & # 39;
Mr Barnier told MEPs this week that today is the final deadline for an agreement as it will have to be signed by the heads of state or government at tomorrow's EU summit.
But the EU downplayed its comments yesterday, suggesting that talks could continue until the end of this month – and possibly into next year.
Downing Street said Britain was ready to continue talks "while we have time" – but ruled out an extension to next year.
Tory Eurosceptics urged Mr Johnson not to resort to the UK's red lines tonight.
In a message to the Prime Minister on Twitter, former Party Treasurer Lord Ashcroft said: “At dinner in Brussels, hold your marbles, pour lead in your pencil, don't walk shakily or cross the indicated red lines … good luck. & # 39;
Former Brexit minister David Jones said a deal is now only possible if the EU gives ground under its feet.
& # 39; We will never again allow our trade and regulatory policies to be dictated by other countries. A free trade agreement is one thing; Submission is another.
The EU can station customs personnel in Northern Ireland, confirms Michael Gove in a concession for border operations
Brussels is allowed to have its officers permanently stationed in Northern Ireland to monitor the control of goods crossing the Irish Sea.
Michael Gove agreed to the concession last night under an agreement with the EU on the functioning of the provincial borders starting next month when the Brexit transition period ends.
After the two sides finalized the plan yesterday, Downing Street confirmed that Boris Johnson would drop his threat to violate international law.
The government said it would remove controversial clauses from the single market law that gave ministers the power to override parts of the readmission agreement signed by the prime minister and EU leaders last year.
The Cabinet Minister, Mr Gove, and the Vice-President of the European Commission, Maros Sefcovic, held discussions on how parts of the Northern Ireland Treaty will work in practice.
The Cabinet Minister, Mr Gove, and the Vice-President of the European Commission, Maros Sefcovic, held discussions on how parts of the Northern Ireland Treaty will work in practice
Their discussions are separate from the post-Brexit trade deals, which have stalled, but the deal could improve relations between the two negotiating teams.
Under the terms Mr Gove will set out to MPs today, the government has agreed that the EU can deploy officials in Northern Ireland to oversee the inspection of goods coming from the UK.
In a briefing for MPs, Sefcovic said up to 30 EU officials will be stationed there and have access to UK databases.
The UK insisted that the deal for Brussels represented an upgrade from its previous request for a "mini-message" in the province.
A government source said: "Under the Northern Ireland Protocol (in the withdrawal agreement) the EU has the right to oversee the processes carried out by the UK authorities, which we will of course support.
"But there will be no mini-embassy, no mission, no building with a flag or a brass plaque."
The deal removes the threat of a blockade preventing British sausages and burgers from being sent to Northern Ireland from next month, despite a long-term agreement pending.
The two sides also resolved other issues, including border controls on animals, export declarations and the delivery of medicines. Mr Gove and Mr Sefcovic signed the agreement yesterday after a nine-hour meeting in Brussels on Monday.
Mr Sefcovic claimed last night that the UK had pulled out under pressure from US President-elect Joe Biden over his threat to override the withdrawal agreement.
He told MPs that "the clear signals" from the new US administration had convinced Mr Johnson to remove the clauses that had angered Brussels.
After the two sides finalized the plan yesterday, Downing Street confirmed that Boris Johnson would drop his threat to violate international law
According to the sources present at the meeting, he said: “They knew how badly this signal was being sent to its European partners and not just us. They also recorded clear signals from the new US administration about the political ramifications of improper implementation of the readmission agreement. & # 39;
A government source said: "We have always said that the UK Internal Market Act clauses are a safety net in case we are not in a satisfactory position on export declarations for vulnerable goods (items that could be brought into the EU via Northern Ireland) and the provisions of the Protocol on State Aid.
& # 39; The fact that we have agreed to remove the relevant clauses underscores that we consider these issues and other outstanding concerns resolved. We got what we wanted. & # 39;
The Single Market Act has hung like a cloud over the Brexit trade talks since ministers admitted the proposed changes would violate international law.
Northern Ireland Secretary Brandon Lewis stunned MPs when he confirmed in September that proposals to restrict the EU's role in the province after Brexit would violate the withdrawal agreement.
Last night, Amanda Pinto QC, Chair of the Advocate Council said, "We are very pleased that the government has withdrawn from its plans to violate international law."
There will be chaos next year if we don't get a result, companies say
Britain's largest industries are facing chaos next year unless a Brexit deal is signed, business leaders warned yesterday.
Leading trade organizations told MPs that many companies are unprepared for a no-deal Brexit only 23 days before the end of the “transition period” with the EU.
Some only turned their attention to the problem after nine months fighting the coronavirus pandemic, they added.
Two of the industries most affected by No Deal would be the food and auto industries, which rely on the smooth flow of goods in and out of the EU every day.
In the event of a no deal Brexit, car sellers and manufacturers will have to pay a 10 percent duty on EU imports and exports.
As a result, Lloyd Mulkerrins, Policy Manager at SMMT, the automotive trade association, warned that customers would have to pay an average of £ 1,800 extra for a new vehicle over the next year as manufacturers pass on tariff costs.
Giving evidence to the Business, Energy and Industrial Strategy Committee, he said: "Some of our members are unaware of the changes and have grappled with surviving Covid. Now they are turning to Brexit late in the day."
He also said that in the worst case scenario, automobile production could be halted altogether if complex supply chains collapse. The food industry will face similar problems as trucks are late at ports and goods are out of date and arrive after their expiration date.
Ian Wright, Executive Director of the Food and Drink Federation, said: “In container ports like Felixstowe and Southampton, there will be long delays because the food is late.
“Trucks need the right papers to get through the ports. It is a case where the driver in front of him has the correct documentation because if not, everyone else will be stopped and punished. & # 39;
Mr Wright described the government's Brexit preparations as a mess, adding that given the negotiations, many companies will not have enough time to react to the changes.
Only the financial industry seemed ready for a no deal, though it also warned that a crash would result in thousands of trillion pound jobs and assets disappearing from the City of London to the continent.
- HONDA has warned that production at its Swindon facility could be halted due to a shortage of parts caused by transportation problems. Traffic has increased in critical areas of the automaker's supply chain in recent weeks as imports spiked at the end of the lockdown in England.
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