A pre-dawn breakthrough? EU and UK poised to announce Brexit trade deal

The European Union and Britain chalked out the final details of a post-Brexit trade deal on Thursday ahead of what negotiators hoped would be a pre-dawn breakthrough.

The two sides are now expected to announce a Christmas Eve trade deal Thursday after ten months of Brexit talks dragged out over yet another late night session.

According to the front pages of several British newspapers, Prime Minister Boris Johnson had emerged victorious in the quest for a pact. In Brussels, however, work continued.

An EU source told AFP that "if all goes well" the two leaders should talk by phone at 0700 GMT to seal the agreement.

While a last-minute deal would avoid the most acrimonious ending to the Brexit divorce, the United Kingdom is heading for a much more distant relationship with its biggest trade partner than almost anyone expected at the time of the 2016 Brexit vote.

Sources in London and Brussels said a deal was close as British Prime Minister Boris Johnson held a late-night conference call with his Cabinet of senior ministers, and negotiators in Brussels pored over reams of legal trade texts.

But the leaders were not able to announce a deal before Christmas Eve arrived, as they had hoped. 

"Brexit work will continue throughout the night," European Commission spokesman Eric Mamer tweeted just after 1.00 am (0000 GMT).

"Grabbing some sleep is recommended to all Brexit-watchers at this point. It will hopefully be an early start tomorrow morning."

"It will hopefully be an early start tomorrow morning," European Commission spokesman Eric Mamer tweeted just after midnight, advising reporters and diplomats alike to grab some sleep as the finishing touches were applied.

Several hours earlier, European officials had confidently told journalists: "We are in the final phase."

There was no official confirmation of a deal but a news conference was expected in London on Thursday morning - just seven days before the UK turns its back on the EU's single market and customs union at 2300 GMT on December 31.

A French government source said UK negotiators had made "huge concessions" on fisheries -- the key sticking point as the clock ticks down to Britain's departure. 

The last-gasp deal, if it is reached, would come just days before Britain is set to leave the EU's single market at the end of the year, sparing the two sides from trade tariffs.

The United Kingdom formally left the EU on January 31 but has since been in a transition period under which rules on trade, travel and business remained unchanged. But from the end of this year, it will be treated by Brussels as a third country.

If they have struck a zero-tariff and zero-quota deal, it would safeguard nearly $1 trillion in annual trade, and support the peace in Northern Ireland - a priority for US President-elect Joe Biden, who had warned Johnson that he must uphold the 1998 Good Friday peace agreement.

Even with an accord, some disruption is certain from January 1 when Britain ends its often fraught 48-year relationship with a Franco-German-led project that sought to bind the ruined nations of post-World War Two Europe together as a global power.

The focus in talks had shifted since Monday to cross-Channel calls between Johnson and von der Leyen after exhausted officials failed to close the gap on how to share access to UK fishing waters.

The remaining differences between the two camps were narrow but deep, in particular over fishing, with EU crews facing a dramatic cut in their catch from British waters.

Failure to reach a deal would mean tariffs on cross-Channel trade in food and goods, exacerbating the economic shock of a return to a customs border after 47 years of integration.

The last-gasp deal, if it is confirmed, would come just days before Britain is set to leave the EU's single market at the end of the year, sparing the two sides from trade tariffs.

A deal -- which would still need to be translated and tidied up by lawyers -- could be approved provisionally before the cut-off date and then scrutinised by EU lawmakers in the new year to avoid a cliff-edge. 

(with inputs from agencies)