France floats veto threat on Brexit deal as EU feels strain

France warned it could veto a trade deal between the U.K. and the European Union if it doesn’t like the terms, piling pressure on the EU negotiating team not to make further concessions as talks build to a climax.

At a meeting of the bloc’s 27 ambassadors on Wednesday, the French envoy warned chief Brexit negotiator Michel Barnier of how bad it would look if he brokered a deal only to see it vetoed by EU leaders, according to a diplomatic note of the meeting seen by Bloomberg. Barnier swerved a request from ambassadors to see key parts of the text before it’s finished, with some of those present voicing concerns he might be giving too much away and leaving them with too little time to scrutinize any agreement.

Once any deal is done, EU leaders must approve it unanimously if it is to take effect, meaning Barnier has to keep all member states on board.

After nine months of work, the negotiations have reached a delicate point, with officials on both sides saying that a deal could be done in the next few days. To get there, uncomfortable compromises still have to be made.

France is leading a group of countries worried that Barnier will surrender too much access to British fishing waters and back down on conditions designed to prevent U.K. businesses getting an unfair competitive advantage.

At the meeting in Brussels, at which Barnier spoke by video link from the talks in London, the French ambassador cautioned him against making too many concessions simply because time was running out. The French position was backed by Belgium, the Netherlands and Denmark, and several ambassadors pressed to see draft text so that they could have enough time to scrutinize it properly.

Barnier’s Last Lap

An EU diplomat briefed on the meeting said some countries were of the view that no deal wouldn’t be the end of the world because they could resume negotiations in 2021. This would mean, however, that trade with the U.K. would become subject to tariffs and quotas after the end of the post-Brexit transition period on Dec. 31.

Barnier pointed out that his role in the process is set to end this year. If talks were shelved until 2021, a new team would have to take up the baton and the EU would have to give it a new negotiating framework while at the same time grappling with the disruption of a no-deal outcome, according to the note.

Spanish Foreign Minister Arancha Gonzalez Laya played down the fight in an interview on Bloomberg TV.

“There are specific interests like, for example, fishing interests or achieving a good deal where we will not see unfair competition on the U.K. side,” she said. “What we did in the last few hours with the EU negotiator is examine the state of affairs like is normal in any negotiation in which the European Union is involved.”

A second diplomat said France’s view wasn’t the opinion of most EU countries and that Barnier’s briefing was intended to calm nerves in Paris.

In response to the ambassadors’ concerns, Barnier said he understood their worries but was sticking within the negotiating mandate he’d been given, according to the note. Still, he was non-committal on whether he would allow an examination of the draft texts. Barnier is reluctant to give member states access to the document to avoid getting drawn into negotiations with EU governments while he is still dealing with the U.K., officials said.

There’s a “good chance” of a deal in the next few days if “we hold our nerve” and trust Barnier, Irish Foreign Minister Simon Coveney told Newstalk Radio. He said he hoped talks were “now finally drawing to a close.”

The two sides have made some progress on the level playing field and on state aid, two major areas of disagreement, but the U.K. has yet to provide details on the national state-aid system it will adopt from next year and how its procedures will work in the event of any breaches, according to the note.

Differences also remain on so-called non-regression clauses that would prevent the U.K. from watering down existing regulatory standards. The U.K. wants a more generic definition of the starting point than the EU does. The bloc also wants to be able to take unilateral measures in the event of “systemic divergences” from agreed standards.

‘Big Mistake’

On fisheries, disagreements remain on access to British waters and fishing quotas, as well as on how to manage disputes. The U.K. wants an annual arrangement, which France and others have said they will not accept.

The EU is also asking to include access to waters six miles to 12 miles from Britain’s coast in the agreement. And a landing zone has yet to be identified on quotas and how to divide up the more than 100 species that are caught in Britain’s waters.

When it comes to how to enforce any deal, Barnier told the envoys that the U.K. still wants to slice up the various sectors that make up the agreement’s chapters. The EU wants one overarching governance package, so all aspects of the deal would be covered by a single dispute-resolution mechanism and cross-retaliation clauses allowing the bloc to respond to a breach in one area by punishing the U.K in another. Barnier told the diplomats he would stick to this position.

He also reiterated that he had reminded his British counterpart, David Frost, that the U.K. had to stick to the terms negotiated in the withdrawal agreement, including on the Northern Ireland protocol.

U.K. legislation giving the government power to renege on the Brexit divorce treaty could also yet spoil the negotiations. Britain is preparing to reintroduce controversial elements of its Internal Market Bill, which would allow it to unilaterally override parts of that agreement, and also table a finance bill with similar law-breaking clauses.

Coveney told Irish lawmakers on Wednesday that such a move would be a “really big mistake at this stage of the negotiations.”

“It will be a signal that they effectively don’t want a deal,” Coveney said to a committee of the Irish Parliament. “I really hope that doesn’t happen.”