UK, EU Strike Deal On Withdrawal Agreement As BoJo Warns Brexit Breakthrough Could Be "Tricky"

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by Tyler Durden
Tuesday, Dec 08, 2020 - 08:57 AM

The pound has caught a bid Tuesday morning on news that the UK has decided to pull several offending clauses of its "Intermarket bill", which would have effectively overriden some of the UK's commitments from the withdrawal agreement, prompting Brussels to walk away from the table.

Talks related to the Intermarket bill were being led by Michael Gove, one of BoJo's top cabinet officials and a one-time rival for the PM job, who announced the agreement on Twitter.

The UK has agreed to withdrawal the three offending provisions after Gove traveled to Brussels to secure the deal. Here's more from the Telegraph.

The UK and EU has struck a compromise "on all issues" in the Withdrawal Agreement Joint Committee, Michael Gove has confirmed. The Chancellor of the Duchy of Lancaster was in Brussels yesterday, in a bid to agree all outstanding issues, including those relating to the Irish border. The agreement means that concerns over the EU's threat that it will check goods travelling between Great Britain and Northern Ireland have been resolved.

In view of these mutually agreed solutions, the UK will withdraw clauses 44, 45 and 47 of the UK Internal Market Bill, and not introduce any similar provisions in the Taxation Bill," the Government said in a statement.

Earlier on Tuesday, Boris Johnson warned that securing a final trade deal with Europe would be "tricky" given the vast differences on the issues of fisheries, governance and the "level playing field". Of these three, fisheries access and the level playing field are said to be the most difficult sticking points.

The pound rallied on the new, but Wall Street analysts remain wary as BoJo has ruled out both an extension to the transition period, and a resumption of talks after the new year.

The PM told reporters Tuesday morning that the situation is "very tricky" but he still hopes to reach a deal. "It’s looking very, very difficult at the moment," Johnson told reporters in his first public comments since announcing he will travel to Brussels in a bid to break the deadlock in negotiations. "Hope springs eternal, and I’ll do my best to sort it out if we can."

The PM has developed a reputation for being a stubborn negotiator, and both London and Brussels have claimed that they would not consent to a "bad" deal, preferring to wait, possibly until long after the UK has exited the bloc's customs union and single market.