UK tells EU: break the Brexit 'impasse' so we can do trade deal

LONDON (Reuters) - Britain told the European Union on Wednesday it needed to break a fundamental impasse to clinch a Brexit trade deal by the end of the year and said an agreement on fisheries might not be ready by July.

The United Kingdom left the EU on Jan. 31 but the main terms of its membership remain in place during a transition period until the end of this year, allowing it time to negotiate a new free trade deal with the bloc.

Failure to reach a deal would convulse global trade just as the world aims to exit the coronavirus lockdown. But so far the talks have not gone well - and that was the only thing on which both sides agreed at the end of the last round.

Asked whether it was possible to reach a trade agreement in the short time remaining, British Cabinet Office Minister Michael Gove said: “My judgment is that it’s perfectly possible to do so.”

“The principal difficulty is not a difficulty of technical detail - the technical detail on both sides is well understood - it’s a difference of political position, and I hope that we can break that impasse,” Gove told the British parliament’s committee on the future relationship with the EU.

The pound was last down 0.5% at $1.2271 GBP=D3 and shed 0.7% versus the euro to 89.68 pence EURGBP=D3, a five-day low. UK chief Brexit negotiator David Frost said the current EU mandate was - in key areas - “not a mandate that is likely to produce an agreement.”

“So if you are asking, do we think the EU needs to evolve its position to reach an agreement, yes we do,” Frost said.

Asked about EU chief negotiator Michel Barnier, Frost said: “It is the job of a good negotiator - and he is one - to assess reality and the genuine positions of the other side and genuine ability to move and if you don’t possess reality in a cold way then you don’t get agreement.”

FISH

Questioned about the impact of COVID-19 on negotiations, Frost said the outbreak had briefly paused talks and while they had since picked up the talks were behind by a week or two.

“The main difficulty we’ve had is... just the difficulty of mimicking by video what happens in a real meeting,” Frost said, reflecting on the value of direct contact with the other side.

Frost said it was also proving difficult to reach a deal with the EU on fishing rules by July, as the sides aspired to do in a joint political declaration.

“I’m beginning to think we might not make it by June 30, though we’ll keep trying,” he said.

Frost was asked about how central Prime Minister Boris Johnson’s senior adviser, Dominic Cummings, was for the talks. Cummings, a key figure in the 2016 referendum campaign to leave the EU, is now under pressure to resign over a 400 km (250 mile) road trip he made during the coronavirus lockdown.

“The Brexit policy is set by the prime minister,” Frost said. “I’ve never had an instruction on these negotiations from Mr Cummings.”