By Gabriela Baczynska and Michael Holden
BRUSSELS/LONDON (Reuters) - The European Union is giving a "final push" in a bid to strike a Brexit trade deal with Britain, its chief negotiator said on Tuesday, with the two sides inching towards agreement on fishing though the politically sensitive matter remains unresolved.
Britain is set to complete its departure from the EU when it leaves the bloc's single market and customs union on Dec. 31, meaning its current free trade arrangements expire.
The two sides have for months been struggling to seal a new deal on everything from trade to transport to energy, with the final stages of the talks coming as EU and other countries have also suspended most travel to and from Britain to try to curb a mutant variant of the coronavirus.
Brussels sources said the two side had narrowed their differences on the highly emotive issue of access to fish stocks from 2021, but the issue remained an obstacle to a deal.
"We are really in a crucial moment. We are giving it a final push," said Barnier, who was due to update the bloc's 27 national envoys on Brexit at 1500 GMT and then speak to the European Parliament.
Earlier, an EU diplomat said agreement was getting closer. "It seems we are crossing the line," the diplomat said.
While EU officials and diplomats said cutting the value of the bloc's fishing catch in British waters by around 30% from 2021 would be too high, the EU was willing to go as far as 25%.
The sources said the number was just one piece of the puzzle, with the length of the transition period on fishing rights beyond Dec. 31, as well as how the EU could retaliate if London cut its vessels out of British waters, equally important.
TRADE RETALIATION
The UK's offer to gradually curb EU access over three years was also deemed too short for the bloc, which wants a longer-term business perspective for its fishing industry, while London has deemed the bloc's recent proposal of six years too long.
Prime Minister Boris Johnson, who campaigned for Brexit in a 2016 referendum on a sovereignty platform, has repeatedly said Britain will become an independent coastal state in control of its waters and who fishes there.
London has hence seen the EU's effort to enshrine trade retaliation in their agreement in the event of losing access to UK waters as excessive, a disagreement that has also played out prominently in another area of trade talks related to ensuring corporate fair play on production standards and state aid.
The sources said a deal could come together this week, next week, or not at all.
European Commission President Ursula von der Leyen and Johnson spoke on Brexit, as well as the coronavirus, in a phone call on Monday, according to EU sources. More calls would come as needed, they said.
Britain, the world's sixth biggest economy, left the EU, a trade and financial bloc of 450 million consumers, last January. An estimated trillion dollars worth of annual trade is at risk if they fail to craft a new accord by the end of this year.
A senior British minister on Tuesday ruled out prolonging Britain's transition out of the EU beyond Dec. 31.