Brexit: Britain is proposing a "pared-down free trade agreement" to end the Brexit stalemate - Sky News

Britain is proposing a "pared-down free trade agreement" to end the Brexit stalemate and get a deal done by the end of October, according to well-placed sources in Brussels, according to an article by Sky News:

"Sky News has been told that the offer to switch away from a fully formed withdrawal agreement - and instead put the focus on a more limited free trade agreement (FTA) - was part of the pitch made by Prime Minister Boris Johnson to his Irish counterpart Leo Varadkar during talks on Thursday."

The article reads as follows:

  • While an FTA will not resolve all of the issues that have dogged the existing UK proposals, insiders have said it is a "cleaner and more straightforward" approach that could form the foundation for a more wide-ranging deal.
  • They are encouraged by the positive reaction to Thursday's talks and think that the backing of Mr Varadkar could be crucial in persuading other EU leaders to support a deal.
  • A number of EU nations - particularly those who will not suffer significant direct repercussions - have made it clear that, as an act of unity with another smaller nation, they will support a proposal if it is backed by the Irish prime minister.
  • An FTA between the UK and the EU would be likely to remove all tariffs on goods crossing between the two areas.
  • However, it would not remove the need for all customs checks - a crucial sticking point in the talks so far.
  • Sky News has been told that UK negotiators have been ever more irritated with what they see as the intransigence of their European counterparts, and by the amount of power that has been invested into the EU's chief Brexit negotiator, Michel Barnier.
  • The British team insist that they have made "significant, wide-ranging concessions" but have received very little in return.
  • They believe that Mr Barnier's contention that UK proposals are not "legally operable" is "completely and utterly wrong", but that Mr Barnier's conclusions "are never challenged".
  • In particular, there is a feeling within the British team in Brussels that the EU has moved its negotiating position.
  • Last October, Mr Barnier gave a speech in which he outlined that customs checks on the Irish border needed to take place "in the least intrusive way possible", including online declarations and regulatory checks by "market surveillance authorities".
  • UK sources believe that these concepts are similar to the ideas they proposed last week, which Mr Barnier lambasted in the European Parliament.
  • However, they believe that, if they can secure the support of Mr Varadkar, the tide could yet turn in their favour.
  • Across EU diplomats, there remains a feeling that agreeing a Brexit deal before 31 October is a long shot, and that the most likely outcome is an extension.
  • However, the mood has slightly changed.
  • "I thought it was dead, but now there is a tiny flicker of life," said one EU source. "It is a curious time."

FX implications: 

GBP/USD remains elevated on the day as traders price out a hard Brexit on the 31st October. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

EUR/USD recaptures 1.10 as dollar suffers a fresh sell-off

EUR/USD is trading above 1.10, recapturing the level as the dollar retreats. After a three-day rally, stocks are cooling but the safe-haven dollar is still under pressure. Coronavirus headlines are eyed. 


GBP/USD extends rally above 1.23 amid USD weakness

GBP/USD is trading above 1.23, some 900 pips off the lows amid dollar weakness. UK coronavirus cases are rising at a growing pace and Brexit talks have been put on ice. 


Cryptocurrencies: Bulls honing their antlers for an upward attempt ahead

The sense of extreme fear is divergent with the levels of the mathematical averages. Bitcoin dominance ratio moves at a structural pivot level and can lead to a trend change. XRP is the winner of the day, but far away from fleeing out of the bearish scenario.

Read more

Gold trades with modest losses below $1620 level, downside seems limited

Gold edged lower through the early European session and is currently placed near the lower end of its daily trading range, just below $1620 level. Concerns over an imminent global recession might help limit losses.

Gold News

US Jobless Claims Analysis: 3 M is only the beginning, 3 reasons why USD may rise

Unemployment is engulfing the US – weekly jobless claims jumped to 3.283 million, an increase of 1,053%. The four-week moving average is near one million, also surpassing the worst since the Great Financial Crisis.

Read more