Prime Minister fear getting a trade deal is looking ‘very difficult’

Downing Street last night warned that striking a Brexit trade deal will now be ‘very difficult’ unless Brussels drops its demands over fishing and state aid.

The EU’s chief negotiator Michel Barnier travelled to London yesterday for informal talks with UK counterpart David Frost amid growing gloom about the chances of a breakthrough.

Formal talks will resume next week, but ministers warn privately that, with the two sides still far apart, there is little sign of progress with only a month left to strike a deal. 

Failure to reach an agreement by the beginning of October would mean the UK leaving without a deal when the Brexit transition period finishes at the end of this year.

The Prime Minister’s official spokesman said a deal was ‘still possible and still our goal’, but added: ‘It is clear that it will not be easy to achieve.’

Talks are stalled over fishing rights and state aid – the rules which govern the subsidies governments can hand to struggling domestic industries. 

In a further blow to hopes of a breakthrough, Germany’s Europe minister Michael Roth yesterday sided with France, Spain and Holland in demanding continued access to British waters for EU trawlers. 

Addressing the European Parliament, he referred to the fish in UK waters as ‘common resources’.

He insisted: ‘Common resources need to be managed together in a sustainable way, which means we cannot accept that the UK would exclude EU fisheries’ efforts from its territorial waters altogether.’

Brussels is also demanding that the UK continues to follow EU state aid rules as part of commitments to respect a ‘level playing field’. 

Mr Barnier is refusing to discuss other matters until the two issues are settled in the EU’s favour. British negotiators accuse Brussels of double standards, pointing out that the EU accepts annual fishing quotas in Norwegian waters and has not made similar demands over state aid when striking deals with countries like Canada. 

The PM’s spokesman yesterday rejected suggestions that the UK should publish its state aid plans, adding: ‘After the transition period, the UK will have its own regime of subsidy control and will not be subject to the EU’s state aid regime.

‘The UK’s future subsidy arrangements are a matter for the British people and Parliament, not the European Union.’ 

Ministers believe a flexible state aid regime will be essential as the UK tries to recover from the pandemic. 

Mr Roth told Euro-MPs that no progress had been made for ‘quite some time’ and accused the UK of ‘moving away from what we had agreed on a long time ago as the basis for the negotiations’. 

He added: ‘We fear we might be running out of time to some extent.’

Ex-Australian PM Tony Abbott, who has spoken to ministers about a role in post-Brexit trade talks, yesterday told MPs in an online meeting he hoped the EU ‘comes to its senses’ and offers ‘at least a Canada-style free trade deal’. 

He said the UK should not fear a No Deal as it was ‘already doing so much on a No Deal basis anyway’.