Officials from both sides of negotiations – which have taken place at breakneck speed compared to the bitter war of wards dominating talks between the UK and European Union – claim many sections of the treaty have now been agreed. But market access remains a major sticking point, and Japan is demanding Britain makes a huge compromise in order to edge a deal over the line to allow it to be ratified before the end of the year. The UK is continuing to press on the sensitive topic of agriculture, and wants to match the “baseline” of the existing Japan-EU trade treaty before agreeing to cut its own tariffs further.
But Tokyo wants the faster removal of British tariffs on industrial goods, something which is clearly frustrating UK negotiators.
A UK official told the Financial Times: “We will work to ensure that a deal can be finalised as soon as possible, but we are clear that we will not accept rollbacks on key UK market access.”
On rules of origin, the UK wants “extended cumulation”, meaning goods would count as British under any deal – even if a lot of components come from Europe – but Japan has so far refused to move on this issue.
There are also outstanding issues non investment and legal trade, with the UK making a late push to demand that Japan reduce its regulatory barriers.
Brexit news: Trade talks between the UK and Japan have hit a major stumbling block
The major sticking points come as a major blow for Britain, which is under pressure to strike a historic agreement and show it can make its own deals outside the EU.
Last month, Japanese chief negotiator Hiroshi Matsuura warned both sides would have to “limit their ambition” because of the tight deadline.
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Brexit news: The UK and EU remain at loggerheads over several issues in trade talks
5.30pm SNP backlash to UK internal market bill to deal with Post-Brexit UK trade
The Scottish Government has pledged to fight “tooth and nail” against Westminster plans it has branded a “blatant power grab”.
Scottish Constitution Secretary Mike Russell made a statement to Holyrood on Thursday, vowing to oppose the UK Government’s proposals to establish a new internal market between the four nations at the end of the Brexit transition period.
The Tories criticised Mr Russell’s “hysterical and misleading rhetoric” and said creating an internal market is necessary to allow firms in Scotland to do business in other parts of the UK.
But the Constitution Secretary said: “Every single power that the Scottish Parliament has can be undermined and taken away by these proposals.
“Every single one.”
3.45pm update: EU no longer seeking Belfast base to oversee trade between Ireland and UK
The EU is no longer seeking a Belfast office to oversee its trade relations with Northern Ireland, it has emerged.
Cabinet minister Michael Gove previously ruled out a request to monitor special arrangements keeping the region in line with EU rules after Brexit.
But Stormont civil servant Dr Andrew McCormick said that time was running out for a free trade deal to be sealed with Europe before the end of this year,
He added: “The Commission are no longer pressing for a representational office in Belfast. What they are asking for is sufficient and proportional oversight.”
Until the end of this year the UK will remain in the EU customs union and single market.
If a free trade deal cannot be sealed with the EU before then the Northern Ireland protocol will be introduced.
Under the terms of the protocol, which is designed to avoid border checks on the island of Ireland, Northern Ireland will be a part of the UK’s customs territory but will still follow EU customs law and administer the bloc’s customs rules at its ports.
The region will also follow EU single market regulations on goods.
2.27pm update: Brussels brags ‘self-involved’ Britain can’t see Brexit is ‘NOT on EU’s radar anymore’
Britain is “too self-involved” to see Brexit isn’t a priority for the EU anymore, a Brussels official has bragged.
An EU diplomat has said Brexit “isn’t on the EU’s radar anymore” after the bloc spent days thrashing out its economic recovery fund to manage the fallout from the coronavirus crisis.
Another expert also described Brexit as a “small beer” in comparison to the other problems the bloc is currently facing.
Brexit news: Boris Johnson has vowed to protect UK fishermen in a trade deal with the EU
1.30pm update: Let’s get over it! SNP split erupts as Sturgeon rival lashes out at Brexit obsession
A huge split has erupted within the SNP after a senior MP and rival of leader Nicola Sturgeon launched an attack on the party’s obsession with Brexit, urging the SNP to drop the argument to focus its attentions on delivering Scottish independence.
Joanna Cherry, who is the SNP’s Shadow Justice and Home Affairs Secretary, said Scotland’s ruling party needed “fresh arguments” to win independence in the country.
She has admitted despite the SNP increasing seats from 35 to 48 in December’s general election, the huge win for Boris Johnson and his Conservative Party means Scotland’s ruling party has a lot less power to sway cross-party votes against the Government.
Writing in Scottish newspaper The National, she said: “The sad reality is that because Johnson won big in England and has an 80-seat majority, the SNP group at Westminster have less power in this parliament with 48 seats than we had with 35 seats in the previous hung parliament.
“The opportunities for the sort of cross-party working that delivered numerous defeats of the UK Government under both Theresa May and Johnson are gone; just as the days of endless Brexit skirmishes are over because the direct result of Johnson’s General Election victory was that Brexit has finally been delivered.”
12.30pm update: Labour warns giant post-Brexit ‘lorry park’ would be ‘bad news’ for UK business
Labour has warned the creation of a huge “emergency lorry park” in Kent to hold up to 10,000 vehicles waiting to travel to Europe would be “bad news for British businesses who have already gone through a terrible time”.
The party’s Brexit spokeswoman Rachel Reeves warned the UK is “staring down the barrel of Brexit” with just five months left until the end of the transition period.
The Government recently acquired a 27-acre site near Ashford and there are fears this will be used as an “emergency lorry park” for thousands of vehicles waiting to travel to continental Europe, as well as border-related checks.
Ms Reeves told the PA news agency: “The Government said this was going to be the easiest ever trade deal ever to negotiate.
“We’re four years later (after the referendum) and we still don’t have a trade deal.
“The Prime Minister said just a couple of months ago that a trade deal would be secured by the end of July.
“Well we are now at the end of July, we don’t have a trade deal, all we have is a blueprint for a giant lorry park in the middle of Kent.
“It is bad news for the British businesses who have already gone through a terrible time in the last few months.”
Brexit news: Nicola Sturgeon has been urged to drop her Brexit argument and focus on Scottish independence
11.48am update: Car industry could face widespread closures and job losses amid fears of ‘double whammy’ of Brexit tarfifs
The Society of Motor Manufacturers and Traders (SMMT) has warned of possible widespread closures and job losses as a result post-Brexit tariffs after data showed the number of cars built in the UK over the past six months has slumped to the lowest since 1954.
A total of 381,357 cars were built in the six months to June, down 42 percent from a year ago.
The SMMT has estimated 11,349 jobs were axed in the past six months at carmakers and companies which supply them with parts and services.
The trade body is calling for trade talks between the UK and EU to be accelerated, warning most car firms have complained of a lack of clarity to prepare for an end of the transition period.
SMMT chief executive Mike Hawes said: “These figures are yet more grim reading for the industry and its workforce, and reveal the difficulties all automotive businesses face as they try to restart while tackling sectoral challenges like no other.
“Recovery is difficult for all companies, but automotive is unique in facing immense technological shifts, business uncertainty and a fundamental change to trading conditions while dealing with coronavirus.
“Our factories were once set to make two million cars in 2020 but could now produce less than half that number, a result of the devastating effects of the pandemic on top of already challenging market conditions and years of Brexit uncertainty.”
11.04am update: Report to Remainer Sadiq Khan – Brexit BIGGER risk than coronavirus
Remainer Sadiq Khan’s team thought Brexit was a bigger risk to London than the coronavirus as the killer disease took hold on the UK, it has emerged.
The London Mayor faces embarrassment today after it emerged his City Hall staff believed Britain’s exit from the EU was a bigger crisis than the pandemic, which has killed more than 600,000 people across the world.
Just eight days before schools were forced to close their doors to fight the outbreak, the Greater London Authority put Brexit, housing supply and the London Plan at the top of its list for the Corporate Risk Register, rating it as 12.
Whereas the coronavirus crisis was rated a 9 in the plans, agreed on March 10 – just weeks before the UK went in to lockdown to stop the spread of COVID-19.
Brexit news: Sadiq Khan’s team thought Brexit was a bigger risk to London than the coronavirus
9.30am update: Pound continues struggles as Brexit standstill weighs heavily on currency
Sterling has risen against a weaker euro but has fallen against the US dollar after the $ 1.30 level reached late in the previous session did not hold, with Brexit and the economic fallout from coronavirus weighing on the currency.
Against the dollar, the pound was at $ 1.2984 at 8.09am, down 0.1 percent since the closure of the stock markets in New York.
The currency was up 0.2 against a weaker euro at 90.535 pence.
ING strategists wrote in a note to clients: “GBP investors remain in a cautious wait-and-see approach as UK-EU trade negotiations (the key driver of the currency) appear at a standstill.
“Looking at EUR/GBP, the pair does not appear overly stretched and more potential GBP stress as post-Brexit uncertainty rises points at further upside potential, in our view.”
8.35am update: EU still doesn’t get it! Brussels tells UK hand over fishing access as it’s ‘no big deal’
The EU has demanded Britain hand over unfettered access to its rich fishing waters in a post-Brexit trade deal because “it’s not such a big give”, in comments which will likely infuriate fishermen across the country.
One of the main sticking points in ongoing trade negotiations between the UK and Brussels remains fishing rights, with David Frost firmly standing his ground on a demand for a zonal attachment system while the EU is urging a compromise.
EU diplomats have mentioned the possibility of Brussels slapping sanctions on Britain in other areas of trade if European trawlers were kicked out of UK seas.
One EU source has suggested that it would be in Britain’s interests to bow to the bloc’s pressure.
They said: “It’s a big ask for the EU and it’s not such a big give for the UK, because in the end it’s access to waters for access to markets.
“You can’t eat fish in the morning, the evening, and at night.”
An anonymous diplomat told The Telegraph: “There is a clear interest on the UK side, because their fleet won’t even be able to fish as much as is now being fished in UK waters, and the majority of their fish products exported to the internal market.”
Brexit news: The EU has demanded Britain hand over unfettered access to its fishing waters
8.08am update: Lib Dem leadership hopeful still wants UK to rejoin the EU
Liberal Democrat leadership hopeful Layla Moran remains hopeful of the UK once again rejoining the EU – despite Brexit already happening.
The Oxford West and Abingdon MP hopes to defeat former Cabinet minister Sir Ed Davey in the battle to lead the party.
She has vowed to continue to fight for closer links with Brussels and even, in the future, the possibility of rejoining, although she conceded that may be 10 years down the line.
Ms Moran said: “I do want us to be the party that one day campaigns for rejoin but I just don’t think we’re there yet.
“I think we should be the torch bearers for why we should have a close relationship with the European Union, there’s still a lot that we can do – on the green agenda for example, making sure that we’re working with other countries on those kinds of international issues – we can still do a lot with them.”
8am update: MPs warn minister for food needed to deal with Brexit and COVID threats
A group of MPs have warned a minister for food security is needed to help with the threats posed by COVID-19 and a “disorderly Brexit”.
The Commons Environment, Food and Rural Affairs Select Committee has released a report which warns the “cannot be complacent” and said possible future crises triggered by climate change or a disorderly end to the Brexit transition period could pose challenges to food supplies.
Shadow Environment Secretary Luke Pollard said: “This is a balanced and measured report that endorses what we have been saying – the Government dithered over food supply and outsourced responsibility to the big supermarkets.
“The real reason for surging food poverty is not a lack of food, it is too much poverty. We need action to ensure families can feed themselves, including improving the chaotic and unfair free school meal voucher scheme.
“Food insecurity is a national security issue. COVID-19 has laid bare serious weaknesses in our food supply chain, which is approaching another severe test this December when the Brexit transition period ends.”