A BREXIT trade deal is “in sight” today – but for a bizarre last minute spat about batteries.
British and EU negotiator are hoping to shake on the 2,000 page accord this afternoon or tomorrow morning – but progress is being held up by a row about electric cars.
Britain is a world leader in green vehicles and is worried about protecting thousands of high tech jobs.
EU talks boss Michel Barnier has told euro MPs that UK demands on the production of electric vehicles have become a major sticking point.
Officials on both sides are hopeful a deal could happen as early as this evening, with talks over a fisheries compromise gathering pace.
EU have told member states to prepare for meeting tomorrow morning if deal signed off today – boosting hopes of an agreement within hours.
One UK source said “no white smoke just yet but they turned up with matches today.”
Another source added: “we’re not far off”
But in the small print of the deal, the UK wants terms that would allow British manufacturers to use imported Chinese batteries in electric cars shipped to the continent.
However Brussels say this is unacceptable, as they’re planning a ban on the use of all power units from abroad starting in 2027.
The UK is a world leader in vehicle production.
We churned out 1.6 million in 2018 of which four-fifths were exported.
Over half of that chunk then went to Europe.
EU diplomats said the Commission has “space to move” on the issue and it’s very unlikely to prove a dealbreaker.
One said: “I don’t think this is a real problem. Our car industry needs this too, and we could be fairly flexible.”
Conditions known as Rules of Origin will govern how much of a product has to be locally sourced to qualify for preferential trade terms.
The EU says at least 55 per cent of the value of any good needs to be home-made, otherwise it will face tariffs and quota restrictions.
Car manufacturing is a particularly sensitive sector, because it has long supply chains using thousands of components from all over the world.
Electric vehicles are most affected because the batteries are so expensive they make up a large part of their overall value.
Sam Lowe, a trade expert at the UK in a Changing Europe think tank, accused Brussels of being protectionist with its demands.
He said the EU’s “heavy handed approach risks undermining its claim to be a world leader on climate change and green technologies”.
Boris Johnson and EU chief Ursula von der Leyen are said to be in regular contact to thrash out an agreement over the last hurdles.
They pair have set up a direct hotline between Downing St and the EU HQ “part and parcel” of the final stretch of negotiations.
Enough progress has been made that a deal is still likely, with a possible deal being inked out on Christmas Day, Irish Prime Minister Micheal Martin said earlier.
He told the media: “If you had a breakthrough tonight or tomorrow, officials in Europe could be working Christmas Day on the text.
“On balance, I think given the progress that has been made that there should be a deal.”
He warned that the final sticking point was fish, and the gap was “still wide”.
Mr Martin added: “You will have read that the European Union put 25% on the table in terms of conceding that amount of catch in the UK waters and a six-year transition period and I think Britain have a far more stringent (position).”
