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BRUSSELS – The European Union and the United Kingdom are heading into the weekend on a “last attempt“ to clinch a post-Brexit trade deal, with EU fishing rights in British waters the most notable remaining obstacle to avoid a chaotic and costly changeover in the new year.

British Prime Minister Boris Johnson said Friday that the only way to get a deal is for the 27-nation bloc to compromise since “the U.K. has done a lot to try and help, and we hope that our EU friends will see sense and come to the table with something themselves.“

“That’s really where we are,” Johnson said, adding “no sensible government“ could agree to the EU demands as they stand.

EU chief negotiator Michel Barnier told the EU parliament both sides were in the “home straight of the negotiations,“ which have already come a long way in nine months of talks but are still short of a final compromise.

Barnier called it “a very serious and sombre situation“ if a deal falls through, with the jobs of hundreds of thousands of people at stake.

The European Parliament has set a Sunday night deadline for the talks since it still will have to approve any deal before Dec. 31, when a transition period following Britain’s Jan. 31 withdrawal from the EU will expire.

“It’s the moment of truth,“ Barnier said. “We have very little time remaining — just a few hours.”

A failure to reach a post-Brexit deal would lead to more chaos on the borders at the start of 2021 as new tariffs would add to other impediments to trade enacted by both sides. The talks have bogged down on two main issues over the past days — the EU’s access to U.K. fishing waters and assurances of fair competition between businesses.

“We have reached the hard nuts to crack,” Barnier said.

Johnson has made fisheries and U.K. control over its waters a key demand in the long saga of Britain’s departure from the EU.

Barmier said the EU understood and respected the U.K’s. desire to rule its own waves, but said that “a credible period of adjustment” had to be given, if EU boats are to be kicked out of British waters despite centuries of tradition of sharing them.

On top of that, the more London denies access to its waters, the more the EU can impose duties and tariffs.

“The European Union also has to maintain its sovereign right to react or to compensate,” Barnier said, highlighting that the U.K. seafood industry is extremely dependent on exports to the 27-nation bloc.

Austria, Denmark, Luxembourg, Portugal and Spain have issued a joint letter calling on the European Union to clearly prioritise renewable energies under an EU-led project aiming to accelerate hydrogen deployment, research and infrastructure.

The European Union launched on Thursday (17 December) a hydrogen “project of common European interest”, or IPCEI, with 23 European countries signing a manifesto paving the way for a cleaner hydrogen value chain.

German Economy Minister Peter Altmaier chaired Thursday’s launch event, which saw Norway and 22 other European countries signing a declaration of intent, or manifesto, in support of the initiative.

However, the five EU countries see the move with scepticism, warning the initiative must not be used as a backdoor to finance fossil gas infrastructure.

“Spain bets exclusively on renewable hydrogen, and considers that EU funds and regulatory support to renewable hydrogen should be prioritised before low-carbon hydrogen, produced with natural gas (blue hydrogen) or nuclear,” an EU source told EURACTIV.

The European Commission sees hydrogen as “a vital missing piece of the puzzle” to achieve deeper decarbonisation in industries like steelmaking and chemicals, which cannot be electrified entirely.

“Clean hydrogen will help our European industries decarbonise, be resilient and stay globally competitive,” said Thierry Breton, the EU’s internal market Commissioner, who was present at the launch event.

Hydrogen: “renewable” or “low-carbon”?

EU member states have squabbled over the past weeks about which type of hydrogen to support, with two opposing camps facing off: those backing green hydrogen produced exclusively from renewable electricity, and those in favour of a broader “low-carbon” definition, which also includes nuclear power and decarbonised gases.

Supporters of “blue” hydrogen say natural gas will be needed in the short term to ramp up production volumes and grow the EU’s hydrogen market, which is currently tiny.

Margrethe Vestager, the EU’s competition chief, sought to clarify the Commission’s approach, saying regulatory support will be targeted only for projects that can make a significant contribution to the EU’s long-term climate goals.

“Developing technologies for low-carbon and, in particular, green hydrogen, and building the necessary infrastructure for its deployment, will take us one step closer to making Europe the first climate-neutral continent by 2050,” she said in a speech at the launch event.

IPCEIs were set up in 2014 and allow EU member states to subsidise high-risk cross-border research and innovation, as well as infrastructure projects, without having to observe the EU’s normally strict state aid rules.

“No member state or business can do this alone,” Vestager stressed. “That’s why it makes sense for European governments to come together to support such important projects of common European interest, if the market alone would not take the risk. And it is why we have put special state aid rules in place to smooth the way.”

But the five EU countries are worried that the new hydrogen IPCEI will be used to support “low-carbon” hydrogen made from natural gas or nuclear power.

They say they signed up to the manifesto – but only “with the understanding that this initiative should exclusively refer to hydrogen from renewable energy sources since we consider this technology as the only long-term sustainable solution to achieve climate neutrality by 2050.”

“Projects within an IPCEI must respect the principle of the phasing out of environmental harmful subsidies,” the signatories of the letter wrote. “Therefore, an IPCEI on hydrogen must only be eligible when produced from renewable sources, where a clear market gap is identified,” the letter said.

The letter was signed by the environment ministers of Austria (Leonore Gewessler), Denmark (Dan Jørgensen), Luxembourg (Claude Turmes), Portugal (João Pedro Matos Fernandes) and Spain (Teresa Ribera Rodríguez).

They were supported in their move by environmental groups, which have expressed doubts about the EU’s hydrogen manifesto.

“This initiative must not become a cover to throw public money into fossil fuels,” said Rita Tedesco from ECOS, a pressure group specialised in green standards.

“Any public support must only be directed to hydrogen produced 100% from renewable sources. The Commission needs to watch this closely, making sure that the renewable origin of publicly-backed hydrogen is certified through a credible certification system.”

“All other types of hydrogen must be excluded from public support, including so-called ‘low-carbon hydrogen’, which increases the risk of greenwashing and would only bring fossil fuels through the backdoor’,” Tedesco said.

[Edited by Zoran Radosavljevic]

President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen have sent congratulations to Party General Secretary and State President Nguyễn Phú Trọng and Prime Minister Nguyễn Xuân Phúc on the 30th fou…

Trung Nguyên coffee company is one among many to be benefitting from the newly ratified EU-Việt Nam Free Trade Agreement. — VNA/VNS Photo Danh Lam

HÀ NỘI — President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen have sent congratulations to Party General Secretary and State President Nguyễn Phú Trọng and Prime Minister Nguyễn Xuân Phúc on the 30th founding anniversary of Việt Nam-EU diplomatic ties.

In their letters, the two EU leaders applauded Việt Nam’s swift and decisive actions to contain the spread of COVID-19, successfully curbing the outbreak and minimising deaths. They also offered condolences to the families of victims in floods in central Việt Nam in October.

They said that over the last 30 years, Việt Nam had witnessed many developments, from the implementation of the đổi mới (renewal) policy; the normalisation of relations with the EU, the US, and China; and its joining ASEAN to extensive structural reforms and the strategy for socio-economic development via global integration.

These factors had helped Việt Nam become one of the fastest-growing economies in the world, according to them.

Given the settlement of important global challenges requiring the participation of both Europe and Asia, the officials congratulated Việt Nam on its constructive role as Chair of ASEAN in 2020.

The EU pledges to intensify EU-ASEAN co-operation and welcomes the official establishment of the EU-ASEAN strategic partnership at the ministerial meeting on December 1.

Việt Nam was now an active member in the world, ready to assume growing international obligations, and share the EU’s strong commitment to multilateralism, they said, adding that the pandemic was a global crisis that needed international solidarity and co-operation.

In their letters, the Presidents of the European Council and Commission said over the last three decades, the EU-Việt Nam partnership had developed unceasingly, supported by agreements covering different domains, from politics, trade, and defence to anti-illegal logging.

By building a stronger partnership, the EU and Việt Nam could handle global challenges, and as a long-standing friend of Việt Nam, the EU would welcome the two sides discussing difficult issues in an open, straightforward and constructive manner, they affirmed.

The officials noted the EU-Việt Nam partnership was first and foremost for the sake of the Vietnamese and European people, and development co-operation would remain an important element in the EU’s commitment to Việt Nam.

They expressed the willingness to enhance ties with Việt Nam in dealing with major global challenges, contributing to peace and development in the world.

Michel and Leyen also hope to visit Việt Nam at an appropriate time.

Thriving relations

Josep Borrell, High Representative of the EU for Foreign Affairs and Security Policy, said in a message on the occasion of the 30th anniversary of diplomatic relations between the two sides that Việt Nam had experienced fruitful co-operation in various sectors in the past 30 years.

Việt Nam is among countries in ASEAN and the Asia-Pacific to have developed comprehensive relations with the EU. He described the signing of the EU-Việt Nam Free Trade Agreement (EVFTA) as an extraordinary step in bilateral ties.

The trade pact was the first comprehensive and ambitious trade and investment agreement the EU has concluded with a developing country in Asia, said Borrell, who is Vice President of the European Commission.

The EU is Việt Nam’s second-largest export market, accounting for 17 per cent of its total exports. Since Việt Nam’s exports to the EU make up just 2 per cent of the bloc’s total imports, there is huge space for the country to boost shipments. Two-way trade has shot up over recent years, with Vietnamese exports primarily being furniture, telephones, machinery, and footwear, while the EU’s exports are mainly aircraft, machinery, pharmaceuticals, and electrical equipment.

The EVFTA came into force at a time with the global economy battered by the COVID-19 pandemic, and has created motivation for trade in goods between the two and boosted the confidence of EU and other investors seeking to develop Việt Nam-EU trade links.

Despite the pandemic, the implementation of the deal has already shown robust signs, with Việt Nam’s exports to the EU in August and September topping US$3.25 billion and $3.1 billion, respectively, year-on-year increases of 4 per cent and 9.5 per cent.

The EVFTA is expected to bring more practical benefits to businesses and people of both sides in the medium and long terms. It is projected to help Việt Nam increase its GDP by 4.6 per cent and exports to the EU by 42.7 per cent by 2025. Meanwhile, the EU’s GDP will rise by an additional $29.5 billion and shipments will increase by 29 per cent by 2035.

Borrell also hailed Việt Nam as an attractive partner of the EU, saying the forums the country had engaged in are vivid illustrations of its strong commitment to multilateralism and a rules-based international order.

At the 53rd ASEAN Foreign Ministers’ Meeting on September 12, Deputy Prime Minister and Foreign Minister Phạm Bình Minh affirmed that in its role as ASEAN Chair 2020, Việt Nam supported efforts to deepen ASEAN-EU relations towards upgrading ties to a strategic partnership, and eventually, Việt Nam’s efforts paid off, with ASEAN and the EU announcing the official upgrade of ties to the strategic partnership level on December 1.

The EVFTA could be used as a model if the EU was to decide to sign free trade deals with ASEAN or other member states.

Regarding peace and security, Việt Nam and the EU have signed a Framework Participation Agreement (FPA), paving the way for Việt Nam to join the crisis management activities of the EU. The first of its kind the EU has inked with an ASEAN country, the agreement will help contribute to the EU’s activities in global peace and security.— VNS