October 15, 2019 / 11:38 AM / a month ago

Brexit deal within reach in last-ditch talks, but doubts remain

LUXEMBOURG/DUBLIN (Reuters) - Last-ditch talks between Britain and the European Union to get a Brexit deal ahead of a summit of the bloc’s leaders this week went on past midnight to Wednesday, but it was still unclear if London could avoid postponing its departure due on Oct. 31.

FILE PHOTO: A partial view shows the Houses of Parliament and the Big Ben clock tower in London, Britain September 11, 2019. REUTERS/Toby Melville/File Photo

Officials and diplomats involved in negotiations over the acrimonious divorce between the world’s fifth-largest economy and its biggest trading bloc said that differences over the terms of the split had narrowed significantly.

However, the European Union’s Brexit negotiator, Michel Barnier, made clear at a meeting of the bloc’s ministers in Luxembourg that if an agreement could not be reached on Tuesday, it would be too late to send anything for leaders to approve at a summit in Brussels on Thursday and Friday.

Barnier also told EU ministers earlier on Tuesday that customs arrangements for the island of Ireland, the issue of giving more say to Northern Irish authorities as well as the so-called level-playing field clauses for fair competition were all still open.

On Tuesday night, an EU official said: “What is outstanding is the level-playing field provisions... There would be no customs duties on goods crossing to Northern Ireland if they were to stay there.”

But, as the clock struck midnight in Brussels, the talks were still going on between Britain’s Brexit negotiator David Frost and the EU’s executive European Commission.

That could force another extension of the date for the UK’s split from the 27 other member states, the third since Britons voted in a June 2016 referendum to quit the EU.

Britain’s plan to leave the EU, which has only ever added new member states, has compounded problems for a bloc torn by euroscepticism and economic disparities.

Britain has itself been polarized bitterly by Brexit.

CLOSE, BUT NOT THERE YET

A second EU official said an agreement was “close but not 100% certain”, adding “there are still parts that need to be nailed down”.

Sterling surged to its highest level against the dollar and the euro since May on Tuesday on rising hopes for a deal.The main sticking point in talks has been the border between EU member Ireland and the British province of Northern Ireland.

The question is how to prevent the border becoming a backdoor into the EU’s single market without erecting controls which could undermine the 1998 peace agreement that ended decades of conflict in the province.

Irish Prime Minister Leo Varadkar told reporters in Dublin that talks had moved in the right direction.

“But whether we will be able to conclude a revised withdrawal agreement, which after all is an international treaty, in time for the summit on Thursday, that’s as of now unclear,” he said, adding that some hours earlier the gap had been “quite wide, particularly on the issue of customs.”

The small Northern Irish party supporting Britain’s minority government said further work was required to get a deal through.

Prime Minister Boris Johnson is likely to need the Democratic Unionist Party’s (DUP) support if he is to get it through a vote in the British parliament.

“We respect (the) fact negotiations are ongoing therefore cannot give a detailed commentary but it would be fair to indicate gaps remain and further work is required,” the DUP said in a statement.

If London is unable to clinch a deal, an acrimonious divorce could follow that would hit trade and business, roil financial markets and potentially lead to the United Kingdom splitting.

WINNING UK PARLIAMENT’S SUPPORT

Even if Johnson wins the approval of Europe’s big powers for the deal his negotiators have proposed, he must still sell it to a British parliament in which he does not command a majority.

Brexit-supporting Conservative lawmaker Owen Paterson said Johnson’s emerging divorce deal was “unacceptable”.

A leading figure in the 2016 referendum who came to power as head of ruling Conservative Party in July, Johnson has pledged to take the country out of the bloc on Oct. 31 whether or not a withdrawal agreement has been reached.

But parliament has passed a law saying Britain cannot leave without an agreement, and Johnson has not explained how he can get around that.

The main obstacle has been around customs, with the latest proposal envisaging that Northern Ireland stays in the UK customs area. Tariffs would apply on goods crossing from mainland Britain to Northern Ireland if they were deemed to be headed further to EU member Ireland and the bloc’s single market.

A compromise of that order could be derailed in the UK parliament, where a rare Saturday session is due to be held this weekend.

Indeed, the DUP insisted that the region must remain within the United Kingdom customs union as part of any Brexit deal and not have to follow tariffs set by the European Union.

Deal or no deal for the summit, EU officials believe another delay to Britain’s departure date is still likely. Extension options range from an extra month to half a year or longer.

Additional reporting by John Chalmers in Brussels and by Kate Holton and Elizabeth Piper in London; Writing by John Chalmers; editing by Mike Collett-White and Lisa Shumaker

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