Brexit Deal Update: Sticking Points Remain On These Two Key Issues

The president of the European Commission said progress has been made on Brexit negotiations, but two key sticking points remain over fishing rights and even-trade initiatives.

The United Kingdom and the European Union are scrambling to resolve the terms of what has so far been a messy divorce agreement. If neither side can come to terms before year’s end, Britain would face uncertain hurdles on trade with the European continent.

Speaking Wednesday before the European Parliament, European Commission President Ursula von der Leyen said there is a way forward on an agreement, but it is a narrow path to tread.

“We have found a way forward on most issues but two issues still remain outstanding: the level playing field and fisheries,” she said in her prepared remarks.

The level playing field refers to a common set of rules meant to prevent businesses in one country from getting a competitive edge over companies operating in other countries. European countries, meanwhile, could endanger future British sovereignty by trolling for fish in its territorial waters, an issue of national pride for the island nation.

Von der Leyen said progress has been made on the issue of even trade through a mechanism of non-regression that ensures European standards on labor, social and environmental issues remain in place.

“And of course, difficulties still remain on the question of how to really future-proof fair competition,” she said. “But I am also glad to report that issues linked to governance, by now, are largely being resolved.”

The British government this week encouraged businesses to apply for a trading scheme that would allow for the transfer of goods into Northern Ireland from Great Britain without paying tariffs. With the British government tied to Belfast, trading with its western neighbor could be complicated by a no-deal Brexit given that Dublin would remain tied to the EU.

On fisheries, the situation remains difficult. The commission president said Europe would not undermine British sovereignty, but bloc members did want a predictable future for European fishers.

“And in all honesty, it sometimes feels that we will not be able to resolve this question,” von der Leyen said. “But we must continue to try finding a solution.”

On a reciprocal basis, the European Parliament has backed a plan to allow fishing to continue, though London said it would assume full sovereign responsibility over its waters starting Jan. 1, 2021.

The Europeans are expected to approve these plans by the end of the week, however, a deal by year's end remains rocky. Von der Leyen and British Prime Minister Boris Johnson issued a joint statement Sunday acknowledging the difficult road ahead.

“… despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over we think it is responsible at this point to go the extra mile,” they said. “We have accordingly mandated our negotiators to continue the talks and to see whether an agreement can even at this late stage be reached.”

The U.K. formally left the EU on Jan. 31 and is now technically in a transition period that keeps it under the EU’s umbrella on trade, travel and business regulations.

Without a deal, the U.K. would be subject to taxes on goods moving into the European economy and border checks would be imposed, possibly disrupting the supply chain for a vaccine for COVID-19.

EU members, however, are open to a six-month contingency plan that would keep vehicle and air traffic moving freely under a no-Brexit situation, provided the British government agrees.