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Pound rallies as negotiation resumes

By EARLE GALE in London | China Daily Global | Updated: 2020-10-23 09:24

European Union chief Brexit negotiator Michel Barnier wearing a protective mask arrives at The Conrad Hotel, ahead of Brexit talks, in London, Britain, Oct 22, 2020. [Photo/Agencies]

Negotiators from the United Kingdom and the European Union agreed to get back around the bargaining table on Thursday afternoon, to resume talks about a potential free-trade agreement, one week after a missed deadline led London to declare them over.

The resurrected talks followed Prime Minister Boris Johnson calling for an end to the process that began after the nation left the bloc on Jan 31.He said on Oct 16 there was no point in continuing talking, unless discussions could be accelerated and taken to the next stage.

Brussels responded by saying it was ready to do just that.

The resumption of talks between the massively interdependent trading partners led to a sharp rise in the value of the pound on international money markets and followed video calls between Michel Barnier, the EU's chief negotiator, and David Frost, his UK counterpart.

The Financial Times said the two sides hope to talk on a daily basis without weekend breaks, until a deal is finalized. It said EU negotiators will stay in London until Sunday, and both teams will then travel to Brussels to continue talking.

The resumption followed Barnier saying in the EU Parliament on Wednesday: "An agreement is within reach if we are, on both sides, prepared to work constructively and in a spirit of compromise."

He also insisted that the EU is not seeking to undermine UK sovereignty.

His comments assuaged UK concerns and a spokesman for the prime minister said in a statement: "It is clear that significant gaps remain between our positions in the most difficult areas, but we are ready, with the EU, to see if it is possible to bridge them in intensive talks."

Britain's Chief negotiator David Frost walks outside Downing Street in London, Britain, Oct 22, 2020. [Photo/Agencies]

Johnson had earlier called for the bare bones of a deal to be in place ahead of a summit of EU leaders on Oct 15 and 16.

When that was not the case, and after EU leaders at that summit called on the UK alone to shift ground to the EU position, Johnson declared the talks over.

Senior UK officials now believe the EU has accepted it too must compromise.

The talks had become bogged down in three areas: access to fishing grounds, the extent to which nations should be allowed to subsidize businesses, and ways in which future disputes between the two sides should be resolved.

The BBC quoted the UK government as saying it is now "ready to welcome the EU team to London to resume negotiations".

European Commission President Ursula von der Leyen greeted the resumption of talks by tweeting: "Hard work needed, no time to lose."

The Reuters news agency said the pound hit a six-week high after the resumption of talks was announced, rising by 1.7 percent against the dollar on Wednesday.

Since leaving the EU at the end of January, the UK has continued to trade with the bloc as if it was still a member. That arrangement, part of a so-called transitional period, ends on Dec 31, after which time the UK will revert to trading with the EU under World Trade Organization rules, if a free-trade agreement is not found. British business groups have said the additional tariffs and delays at borders that would result from such a situation-a so-called no-deal Brexit-would be catastrophic for the British economy.

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