A 650 million-euro rounding error could derail a Brexit deal

A trade deal between Britain and the European Union, one of the biggest such accords the world has ever seen, could be derailed by what amounts to a rounding error.

With the deadline for an accord fast approaching, negotiators from the two sides are still at loggerheads over what rights EU boats will have to fish in British waters after the Brexit transition period ends on Dec. 31, a senior diplomat from the bloc said on Friday.

The bloc has made an agreement on the issue a precondition for any wider trade deal. Failure to reach one wouldn’t just leave businesses grappling with tariffs and quotas, but it could also sour relations between the EU and its closest ally in foreign and security policy and have knock on effects in areas ranging from aviation to finance and scientific research.

At just 650 million euros ($767 million), the value of the fish caught by EU vessels in British waters annually is tiny relative to the half a trillion dollars of goods traded between the bloc and the U.K. each year, according to the diplomat. For their part, British boats get about 150 million euros of fish from EU waters, the diplomat said.

But the sector, which represents a tiny fraction of the EU and U.K.’s respective economies, is politically important for several member states, including France, Belgium, the Netherlands, and Denmark, the diplomat added, asking not to be named, in line with policy. Asked how such a small constituency can have such large leverage in the negotiations, another EU diplomat said that you can’t ask a cat to give up mice from its diet.

Negotiators from the two sides will meet in Brussels on Monday. EU leaders will take stock of progress when they meet later in the week, though the diplomat insisted the summit isn’t seen by the bloc as a deadline for reaching an agreement. That could come at the end of the month given that member states need time to ratify any accord by the end of the transition period, they noted.

In addition to fishing, negotiators are struggling to bridge their disagreement over the so-called level-playing competitive field—provisions that would ensure the U.K. won’t undercut the bloc’s standards in areas such as state subsidies or environmental and employment policy. But even there, the key to unlock a deal is fish, according to the diplomat, who said the bloc sees the U.K.’s hard stance on quotas as an attempt extract concessions from the EU on what state aid rules the country will have to follow in future.