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UK and EU remove ONE obstacle to trade deal as Northern Ireland divorce terms are settled after bitter row - but wider standoff deepens as PM warns he WON'T cave in on sovereignty and Brussels trolls it will negotiate again after No Deal chaos

The EU and UK today announced that one major obstacle to a trade deal has been removed with agreement on how the Brexit divorce deal will be implemented.

Cabinet Office minister Michael Gove and counterpart Maros Sefcovic declared that they had reached a settlement on how Northern Ireland will be treated after January 1, whether or not wider trade terms are in place.

Clauses in the Internal Market Bill that would have overridden the Withdrawal Agreement - something the EU had complained breached international law - will now be removed, and similar measures will not be included in the forthcoming Taxation Bill.    

The announcement is evidence of some much-needed goodwill as the sides seem deadlocked on fishing rights, state aid rules and enforcement. 

It effectively means all the 'loose ends' left to be resolved after the divorce agreement are tied up. 

However, the broader standoff shows little sign of easing ahead of a crucial face-to-face meeting between Boris Johnson and Ursula von der Leyen, with the EU trolling that it is ready to negotiate again next year after no deal chaos.

For his part the PM issued a stark warning that he is near the 'limits' on Brexit and could 'draw stumps' if there is no progress at the talks with the EU commission chief.

'Our friends have just got to understand the UK has left the EU in order to be able to exercise democratic control over the way we do things,' Mr Johnson told reporters during a visit to a hospital.

'There is also the issue of fisheries where we are a long way apart still. But hope springs eternal, I will do my best to sort it out if we can.'

Michel Barnier - who is said to have sabotaged a fledgling deal that was emerging last week - swiped that the EU will 'never sacrifice our future for the present'.

And the commission played up the prospect of the UK crawling back to the table within months if there is no agreement - something French diplomats have been claiming will happen as the fallout will be so bad.

Downing Street responded by again completely ruling out holding any trade discussions with the bloc in 2021.

Meanwhile, Mr Johnson is facing mounting pressure from both wings of the Conservative Party, with Eurosceptics warning that he must not make any more concessions - but moderates saying he will face a bigger threat to his leadership if he does not strike a bargain. 

Any package agreed with the EU would need to be put into legislation and approved by Parliament. By contrast, no deal is the default option at the end of the transition period and any vote on the issue in the Commons would almost certainly be symbolic.  

The PM said he would 'do my best' to resolve the impasse when he meets the EU commission president face-to-face in the coming days

The PM said he would 'do my best' to resolve the impasse when he meets the EU commission president face-to-face in the coming days

The move comes after days of fruitless talks following a diplomatic bombshell from Michel Barnier (pictured) last weekTwo lengthy phone calls to the European Commission president Ursula von der Leyen (pictured) failed to break the deadlock

On Thursday afternoon, Michel Barnier re-tabled old demands for the UK to respect not just existing EU laws, but all laws that the bloc might pass in the future. He was reportedly furious that his boss Ursula von der Leyen had gone soft on Britain while he was self-isolating

According to Downing Street, the PM told Cabinet this morning that 'any deal must respect our core principles'. A spokesman said: 'He stressed that the UK would thrive with or without a Free Trade Agreement with the EU.'

According to Downing Street, the PM told Cabinet this morning that 'any deal must respect our core principles'. A spokesman said: 'He stressed that the UK would thrive with or without a Free Trade Agreement with the EU.'

Ministers discussed the ongoing Brexit wrangling at the Cabinet meeting this morning

Ministers discussed the ongoing Brexit wrangling at the Cabinet meeting this morning

What are the sticking points in Brexit talks? 

FISHING

The UK has insisted that it will take back control of its coastal waters from the end of the transition period.

But the EU was demanding its fleets maintain previous levels of access - with Emmanuel Macron under particular pressure from the French fishing industry.   

Initially the UK said it wanted to reclaim 80 per cent of the EU quotas from January 1.

However, Brussels suggested that only 18 per cent should be restored.

The two sides are thought to be close to a 'landing zone' that includes a transition period, perhaps of five or seven years. However, the UK denies there is a settlement yet.

LEVEL PLAYING FIELD 

The EU has insisted the UK commits to 'level playing field' provisions, guaranteeing that it will not undercut businesses on the continent with lower environmental standards and regulation.

State aid has emerged as a particular issue, especially as coronavirus puts swathes of the economy unviable. 

But the UK says it must regain sovereign powers to decide on rules, even though it has no plans to lower standards or warp competition by subsidising the private sector. 

It appeared this area had been resolved in principle last week, before France reportedly laid down a series of extra conditions including huge punishments for breaking the rules. 

GOVERNANCE

The enforcement of any deal, and who decides whether rules are broken, has been one of the flashpoints from the start.

Breaking free of the European Court of Justice was among the biggest demands of Brexiteers from the referendum. 

But the EU has been pushing to keep control of the governance, as well as insisting on tough fines and punitive tariffs for breaches.

The situation has been inflamed by the row over the UK's Internal Market Bill, which gives ministers the power to override the previous Brexit divorce terms to prevent blockages between Britain and Northern Ireland.

Critics say that demonstrates why the enforcement mechanisms must be potent. 

The manoeuvring came after a 40-minute phone call with Ms von der Leyen failed to break the deadlock over fishing rights, level playing field rules and governance.

Lord Frost and the EU's Michel Barnier have been wrangling intensely for months but proved unable to settle the last three issues.

There were extraordinary claims today that Mr Barnier subtly sabotaged a package that seemed to be emerging last week.

The French former minister was apparently unhappy with elements that had been pencilled in by Ms von der Leyen's team while he was self-isolating and having technological troubles engaging.  

As a result on Thursday afternoon, Michel Barnier re-tabled old demands for the UK to respect not just existing EU laws, but all laws that the bloc might pass in the future. 

The 'repackaged' plan would bind Britain to EU rules 'in perpetuity', on pain of 'lightning' tariffs that could be imposed on UK exports unilaterally by Brussels if they digressed from EU labour and environmental standards.

The move – pushed by French President Emmanuel Macron – was flatly rejected by Mr Johnson with warnings that the EU has 'miscalculated' by assuming the UK will back down. 

Mr Barnier and Lord Frost were meeting again in Brussels today to thrash out a joint overview of the remaining disputes ready for the leaders.

The EU negotiator told reporters enigmatically that 'more than ever, Brexit is a school of patience – even a university of patience'. 

And after a meeting with the General Affairs Council, he wrote on Twitter: 'Briefed all member states at the #GAC today. Full unity. 

'We will never sacrifice our future for the present. Access to our market comes with conditions.

'Working closely with @DavidGHFrost and team to prepare upcoming meeting between @vonderleyen and @BorisJohnson.' 

In a high-stakes gamble, the Prime Minister announced last night that he will take personal charge of the trade negotiations.

Mr Johnson's decision to travel to Brussels – probably tomorrow – came after a second lengthy phone call with Ms von der Leyen in 48 hours.

In a joint statement, the two leaders said the negotiating teams will be asked to prepare an overview of the 'remaining differences' ahead of the crunch meeting. 

They added: 'We agreed that the conditions for finalising an agreement are not there, due to the remaining significant differences on three critical issues: level playing field, governance and fisheries.

'We asked our chief negotiators and their teams to prepare an overview of the remaining differences to be discussed in a physical meeting in Brussels.'

Tory Eurosceptics have continued to push Mr Johnson not to cave into the demands from Brussels.

Former minister David Jones said: 'The EU must understand that, while we are committed to good relations with our neighbours, we will never again allow our trade and regulatory policy to be dictated by other countries. A free trade agreement is one thing; subservience is another.' 

However, a senior Tory MP told MailOnline that Mr Johnson will be at greater risk of being ousted if he fails to get a deal with the EU than if he compromises.

They insisted the One Nation group on the Conservative benches - which met last night to discuss its position - makes up two-thirds of the party. 

EU and UK strike deal on Northern Ireland divorce terms 

The EU and UK today announced that one major obstacle to a trade deal has been removed with agreement on how the Brexit divorce deal will be implemented.

Cabinet Office minister Michael Gove and counterpart Maros Sefcovic declared that had reached a settlement on how Northern Ireland will be treated after January 1, whether or not wider trade terms are in place.

Clauses in the Internal Market Bill that would have overridden the Withdrawal Agreement - something the EU had complained breached international law - will now be removed, and similar measures will not be included in the forthcoming Taxation Bill.    

The announcement provides some much-needed goodwill as the sides seem deadlocked on fishing rights, state aid rules and enforcement. 

It effectively means all the 'loose ends' left to be resolved after the divorce agreement are tied up. 

A joint statement said: 'Following intensive and constructive work over the past weeks by the EU and the UK, the two co-chairs can now announce their agreement in principle on all issues, in particular with regard to the Protocol on Ireland and Northern Ireland.'

The agreement covers issues including border checks on animal and plant products, the supply of medicines and deliveries of chilled meats and other food products to supermarkets.

There was also 'clarification' on the application of rules on state subsidies.

But those MPs prefer to work behind the scenes rather than 'touring the radio studios mouthing off' like hardline Brexiteers.

'The problem the PM has got is that it is all very well the Brexiteers saying ''if the ERG are not happy he is finished'',' the senior Tory said.

'That is bull**** because they haven't got the numbers. If he doesn't get a deal he could be finished. 

'There is enough of a majority in the party who believed him when he said he was going to get a deal.

'The letters could pour in if he doesn't get a deal. That is where his bigger threat lies, and I think he knows that.' 

Under Tory rules, a confidence ballot is triggered if 10 per cent of MPs send letters to 1922 chairman Sir Graham Brady requesting one.   

Downing Street says it has yet to be decided when Mr Johnson will travel to Brussels. 

But sources insisted the PM would not gatecrash a summit of EU leaders in Brussels due on Thursday and Friday – leaving tomorrow as the most likely option. 

Downing Street said there are 'no plans' for Mr Johnson Johnson to meet Mr Macron or German chancellor Angela Merkel. 

No10 refuses to rule out MPs sitting over Christmas to pass deal 

Downing Street today refused to rule out MPs being made to sit over the Christmas period to pass any Brexit deal.

Asked if there were contingency plans for the Commons to sit between Christmas and New Year's Eve, the Prime Minister's spokesman said: 'We believe that should we reach a free trade agreement there is parliamentary time to put it through the House.

'I think we have seen previously Parliament's ability to pass things at a good speed where necessary and we continue to believe that there is time to do so.'

The spokesman said 'time is obviously in short supply' but that the Government wanted to reach a deal 'as soon as possible'.

The spokesman also again flatly ruled out talks going on next year. 

'Negotiations won't continue into next year. That has been our position throughout.' 

No10 did not rule out MPs being made to sit over the Christmas period to pass any Brexit deal.

Asked if there were contingency plans for the Commons to sit between Christmas and New Year's Eve, the Prime Minister's spokesman said: 'We believe that should we reach a free trade agreement there is parliamentary time to put it through the House.

'I think we have seen previously Parliament's ability to pass things at a good speed where necessary and we continue to believe that there is time to do so.'

The spokesman said 'time is obviously in short supply' but that the Government wanted to reach a deal 'as soon as possible'.

Mr Barnier yesterday told MEPs that tomorrow was the final deadline for a deal.

Mr Johnson said he is prepared to keep trying for a deal right up until the wire.

'We are always hopeful but there may come a moment when we have to acknowledge that it is time to draw stumps, and that is just the way it is,' he said.

'We will prosper mightily, as I have always said, under any version, and if we have to go for an Australian solution then that's fine too.'

He added: 'There are just limits beyond which no sensible, independent government or country could go and people have got to understand that.'

The EU goaded Mr Johnson today by saying it is ready to negotiate again next year if there is no deal.

French diplomats have been claiming that the UK will come crawling back to the table within months if there is no agreement, as the damage will be so bad.

However, Downing Street has completely ruled out holding any discussions in 2021. 

Commission spokesman Daniel Ferrie said the mandate given to officials by the 27 member states and the European Parliament would permit further talks.

'If that deal is not in place on January 1, then we have a no-deal situation,' Mr Ferrie said.

'That does not exclude that negotiations can continue – from our side – and it does not exclude that we can continue on the basis of the mandate that is given to us.'

Before the call with Ms von der Leven, Mr Johnson offered an olive branch to the EU by saying he would drop controversial measures in the Internal Market Bill, which break last year's Brexit deal on issues relating to Northern Ireland.

But with time running out before the end of the Brexit transition this month, ministers remained downbeat about the prospect of a deal.

Mr Barnier dashed hopes for a deal when he reentered the political arena, having been forced to step back after one of his aides tested positive for coronavirus. 

While he self-isolated, his boss Ms von der Leyen took over talks and went soft on Britain, making concessions on fisheries and the 'level playing field'.

British sources told the Times that Mr Barnier was furious the EU was trying to get a deal with the UK 'at whatever' cost. This set the scene for a showdown between France and Germany over how much to concede to Britain that threatened the bloc's united front against London.

After his chief negotiator warned talks were on the brink of collapse Mr Johnson (pictured) accepted that the benefits of going to Brussels now outweighed the risks.

Wary of the tactics used to humiliate Theresa May, Boris Johnson has been reluctant to travel to Brussels. But after his chief negotiator warned talks were on the brink of collapse – and two lengthy phone calls to the European Commission president failed to break the deadlock – Mr Johnson accepted that the benefits of going to Brussels now outweighed the risks

France began the war of words, with its permanent representative to Brussels, Philippe Léglise-Costa, accusing Germany of allowing Mrs von der Leyen to give too much away during negotiations.

He then reportedly told other 'doveish' member states including Sweden that France would veto any deal agreed with Britain unless London made concessions and Mr Barnier was allowed to toughen up the EU's position. 

Germany hit back at the French, the Dutch and others for being 'jittery'. 

A France-led alliance of nations which included Spain, Italy, Denmark and the Netherlands put pressure on Germany, Austria and Sweden, and ultimately forced the Commission to suddenly toughen its stance with Britain on Thursday.    

A UK source told the paper: 'We went from a position on Thursday morning where we thought we could see our way through to a deal by the weekend to one where it looked almost impossible to see how we'd ever get a deal.'    

Mr Johnson had been preparing to agree a 'non-regression' clause that would see the UK maintain existing standards on issues such as state aid, workers' rights and the environment.

With Michael Gove having travelled to Brussels yesterday, rumours continued to swirl about possible compromise

With Michael Gove having travelled to Brussels yesterday, rumours continued to swirl about possible compromise  

However, sources said the demand for the UK to align with future EU regulations was 'a complete non-starter'.

Lord Frost was so alarmed that he broke off from the talks in a dingy conference room in the Business Department – dubbed 'the Cave' – to brief the PM in person.

Mr Johnson was later heard singing Waltzing Matilda in his office in an apparent reference to trading with the EU on Australian-style terms – No 10 code for No Deal.

The weekend saw the Chief Whip Mark Spencer bombarded with messages from Tories urging Mr Johnson not to back down.

Eurosceptic MP Andrew Bridgen warned publicly that the PM would be 'finished' if he failed to protect British sovereignty.

UK officials were quick to point the finger at Mr Macron for torpedoing talks that had seemed destined for success just days earlier.

Environment Secretary George Eustice admitted: 'There's no denying that the end of last week was quite a setback.'

One source said: 'At the start of the week we saw Macron agitating with other EU capitals that they were giving away too much.

On Saturday the PM spent an hour on the phone to Ursula von der Leyen, president of the European Commission

On Saturday the PM spent an hour on the phone to Ursula von der Leyen, president of the European Commission

'Then you see Barnier bringing this back and the whole process goes backwards. I think everyone can join the dots.

'We want a deal but it has to be on the basis that we are a sovereign country again. Some people still seem to be struggling with the concept that we are going to be an independent country setting our own rules. If it stays like that there will be no deal.'

On Saturday the PM spent an hour on the phone to Ursula von der Leyen, president of the European Commission.

The call was by all accounts cordial but unproductive.

Lord Frost and his team were soon back at London's St Pancras station, boarding the Eurostar for another round of face-to-face talks.

Amid growing signs of tension on the EU side, Dutch sources briefed the media that the bloc was preparing to drop France's hardline demands on fishing – only for the claim to be denied by both sides.

With Michael Gove having travelled to Brussels yesterday, rumours continued to swirl about possible compromises.

Mr Johnson, meanwhile, got to grips with a crab on a walkabout in his constituency with his London mayoral candidate Shaun Bailey.

Later he spent another 40 minutes on the phone with Mrs von der Leyen – but this call also yielded no significant results.

Mr Johnson had attempted to smooth the way to a deal by offering to drop controversial measures relating to Northern Ireland, which ministers admit would 'break international law' by going against parts of last year's Withdrawal Agreement. The move appeared to have no effect.

'There has not been any progress since Friday,' said one source close to the negotiations.

'It is clear that the current process has got to the end of the road – there are only so many times that negotiators can go round the same issues without some fresh political input.

'We still think we can get a deal but there is a very real chance that we might not got there.'

'We have made no tangible progress,' No 10 said last night. 'It's clear this must now continue politically.'

By Jason Groves in London and James Franey in Brussels for The Daily Mail

Boris Johnson will head to Brussels this week in a last-ditch bid to save the Brexit talks.

 

In a high-stakes gamble, the Prime Minister will take personal charge of trade negotiations that appear to be running out of road, and hold talks with European Commission chief Ursula von der Leyen (pictured) in the hope of breaking the deadlock

In a high-stakes gamble, the Prime Minister will take personal charge of trade negotiations that appear to be running out of road, and hold talks with European Commission chief Ursula von der Leyen in the hope of breaking the deadlock

One senior Government source said there remained 'every chance' of No Deal, adding: 'Talks are in the same position now as they were on Friday. 

'We have made no tangible progress. It's clear this must now continue politically. Whilst we do not consider this process to be closed, things are looking very tricky and there's every chance we are not going to get there.'

Another source flatly denied suggestions Mr Johnson was travelling to sign off a deal that is already all-but there, adding: 'Anyone who thinks this is some sort of victory lap has no idea what is going on.'

The prospect of Mr Johnson trying to strike a grand bargain on Brexit is likely to alarm some Tory Eurosceptics.

One MP warned Mr Johnson against capitulating to the EU's demands that Britain remain tied to Brussels regulations for ever, adding: 'If the PM goes to EU summit with that in mind, he will come back as Neville Chamberlain, instead of Winston Churchill.'

Mr Johnson's decision to travel to Brussels – probably tomorrow – came after a second lengthy phone call with Miss von der Leyen in 48 hours failed to produce a breakthrough

Progress towards a deal was torpedoed last week after French president Emmanuel Macron pressured Mr Barnier to toughen his stance.

Mr Barnier is demanding that EU trawlers accept only modest cuts to their quotas in British waters, and that these are phased in over ten years – a request branded 'ludicrous' by Environment Secretary George Eustice.

On the wider issue of the so-called 'level playing field', Mr Johnson has signalled he is willing to guarantee that existing EU standards on things such as state aid subsidies, workers' rights and the environment will not be cut after Brexit.

But Mr Barnier last week upped the EU's demands to require the UK to also stay in line with regulations that Brussels passes in the future – a request branded 'completely unacceptable' by No 10.

The EU is also insisting on the right to levy 'lightning tariffs' on the UK if it judges that Britain has diverged too far from Brussels regulations. 

Mr Macron has warned he is ready to veto any deal he deems unacceptable. But German Chancellor Angela Merkel has made clear she wants agreement.

In a joint statement following the 40-minute call last night, the two leaders said EU negotiator Michel Barnier (pictured) and the UK's David Frost will be asked to prepare an overview of the 'remaining differences' ahead of the crunch meetingBritain's Chief Negotiator of Task Force Europe David Frost

In a joint statement following the 40-minute call last night, the two leaders said EU negotiator Michel Barnier and the UK's David Frost will be asked to prepare an overview of the 'remaining differences' ahead of the crunch meeting

Both leaders have been in close contact with Miss von der Leyen about tactics in recent days, but sources said neither was currently willing to discuss the deal directly with Mr Johnson.

Both sides yesterday acknowledged that the talks were in crisis. Cabinet Office minister Penny Mordaunt told MPs that talks were at a 'critical moment', with the level playing field being the 'most difficult' issue.

Mr Barnier told MEPs the two sides were facing 'huge problems', adding: 'When it comes to timing, we are in the end game. In any event there will be a decision by Thursday. So let's say on Wednesday, we cannot go beyond that. Be it negative or positive.'

Irish foreign minister Simon Coveney said: 'Having heard from Michel Barnier this morning, really the news is very downbeat. I would say he is very gloomy.'

No Deal would mean tariffs on goods traded between the UK and EU. Ministers are also worried about the prospect of severe disruption to Channel crossings.

One Cabinet source said: 'The possibility of chaos on the Channel crossing has been underpriced.'

The pound fell sharply on the gloomy signals emerging from both camps before recovering most of its value in the wake of the announcement of the meeting between Mr Johnson and Miss von der Leyen.

In the Commons, senior Tories urged the PM not to abandon his negotiating position.

Former Cabinet minister Liam Fox said: 'We all want to see a deal but the difficulties are not really about trade... but EU politics.

'It's about ensuring no country follows the United Kingdom in exercising their legal powers to leave the European Union, and the desire of some in the EU to limit the competitive potential of post-Brexit Britain.'

Fellow Tory Philip Davies urged the PM to 'stand firm in these negotiations and deliver on the Brexit so many people voted for'.

Labour deputy leader Angela Rayner said: 'A year after he told the British people his deal was 'oven-ready', the fact he is making a last-dash trip to Brussels demonstrates the scale of his failure.'  

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