European Union's chief Brexit negotiator Michel Barnier (center) arrives for a meeting of EU ambassadors in Brussels on Dec 22, 2020. (JOHN THYS / POOL PHOTO VIA AP)

BRUSSELS/LONDON - A senior European diplomat told Reuters on Wednesday that a Brexit trade deal was imminent and could be clinched within hours, raising hopes that Britain and the European Union can avoid a turbulent economic rupture in just eight days.

There was no confirmation from Britain that a deal was about to be struck; the two sides have given a dizzying array of conflicting signals over recent days.

Since formally exiting the EU on Jan 31, the United Kingdom has been negotiating a free trade deal with the bloc in an attempt to ease its exit from the single market and customs union at the end of this year

An accord would ensure that the goods trade that makes up half of annual EU-UK commerce, worth nearly a trillion dollars in all, remains free of tariffs and quotas.

The senior diplomat, who spoke on condition of anonymity, said EU member states would have to approve a provisional application of the deal with effect from Jan 1 because there was not enough time for the European Parliament to ratify it.

EU member states have started to prepare their procedure to implement any deal from Jan 1, three diplomatic sources in the bloc told Reuters.

“It seems the deal is pretty much there. It’s a matter of announcing it today or tomorrow,” said one EU diplomat.

Britain for its part said that two significant issues - fishing and competition - still remained to be resolved and that there had not been sufficient progress for a deal. The European Commission declined to comment.

Sterling jumped more than 1 percent against the dollar on the Reuters report.

Since formally exiting the EU on Jan 31, the UK has been negotiating a free trade deal with the bloc in an attempt to ease its exit from the single market and customs union at the end of this year.

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Ultimately, Prime Minister Boris Johnson, who is grappling with a deepening COVID-19 outbreak and a border crisis at Europe’s busiest truck port, will have to decide if the narrow deal on offer is worth signing up to.

Walking away might elicit applause from many Brexit supporters at home but would trigger severe trade disruption and end the EU divorce in acrimony.

Deal time?

The EU is making a “final push” to strike a trade deal with Britain, although there are still deep rifts over fishing rights, chief negotiator Michel Barnier said on Tuesday before meeting EU ambassadors in Brussels.

Barnier told the closed-door gathering that the UK’s latest offer on sharing out the fish catch from British waters from 2021 was “totally unacceptable”, according to EU diplomats who spoke on condition of anonymity.

ALSO READ: EU rebuffs Boris Johnson's latest Brexit concession on fish

The sources said Britain has offered a 35 percent cut over three years in the value of the bloc’s catch for demersal fish, like the sole, that live close to the sea floor or the shore.

But that would not cover pelagic fish like the mackerel that live in open waters, where the catch would be subject to annual negotiations.

EU officials and diplomats said the bloc could be willing to cut the value of its fish catch in British waters by around 25 percent.

EU officials said the bloc could be willing to cut the value of its fish catch in British waters by around 25 percent, while sources said that Britain has offered a 35 percent cut over three years in the value of the bloc’s catch for demersal fish that live close to the sea floor or the shore

The sources said there was no clarity on the crucial zone stretching six to 12 nautical miles from UK shores where many smaller French or Belgian vessels fish. The loss of such access could not be compensated in the open seas.

The sources also said the length of the fisheries transition regime was also an obstacle, as was the question of EU retaliation if London excludes its vessels from British waters afterwards - something that Britain says is excessive.

The UK wants to gradually curb EU access to its fishing waters over three years, while the bloc is proposing six years, to give its fishing industry longer to adjust.

The EU needs at least four days to carry out procedures ensuring any agreement is applied from Jan 1, EU diplomatic sources said, meaning a deal is needed by early next week to avoid trade ruptures.

While EU sources said an agreement was getting closer, they warned it might not come in time.

“The EU will not close its door to the UK, and remains ready to negotiate even beyond the 1st of January,” said an EU diplomat.

Calls between Johnson and Ursula von der Leyen, head of the executive European Commission, which is negotiating with Britain on behalf of the member states, will take place as needed, EU officials said.

“I can’t imagine that we won’t find a deal,” Austrian Foreign Minister Alexander Schallenberg told the country’s APA news agency in an interview on Tuesday.

“I would consider it absurd if, after years of divorce negotiations, the UK ultimately jumps ship without a parachute and we suddenly no longer have any contractual relations at all,” Schallenberg added.