Brexit: Trade deal barrier removed as UK agrees 'in principle' to withdraw law-breaking clauses of legislation

The UK has agreed to remove the law breaking elements of a piece of Brexit legislation that had been threatening to derail the prospect of a free trade deal with the EU and US.

Boris Johnson's government has agreed "in principle" to remove controversial aspects of the UK Internal Market Bill, meaning there has been a resolution on "all issues, in particular with regard to the Protocol on Ireland and Northern Ireland".

A joint statement from the UK and EU was released following meetings between Chancellor of the Duchy of Lancaster Michael Gove, and the vice president of the European Commission Maroš Šefčovič, which had been aimed at finalising the Withdrawal Agreement.

The statement said: "In view of these mutually agreed solutions, the UK will withdraw clauses 44, 45 and 47 of the UK Internal Market Bill (UKIM), and not introduce any similar provisions in the Taxation Bill."

Mr Gove thanked Mr Šefčovič for participating in talks and said he would update Parliament on the agreement on Wednesday.

The European Union had taken issue with the UKIM - which could have overridden the Withdrawal Agreement - and European Parliament had said members would block any trade deal with the UK if it went ahead with the Bill.

Likewise, US President-elect Joe Biden had also suggested he would not agree a trade deal with the UK due to the impact the Bill may have had on the Good Friday Agreement.

The government had previously admitted that enacting the Bill in its previous form would breach international law in a “very specific and limited way” by allowing Britain to renege on aspects of the Withdrawal Agreement which had been signed by the EU and UK in October last year.

With controversial elements of the Bill removed, the PM may have an easier job of securing a trade deal when he meets European Commission President Ursula von der Leyen this week.

The trip is being viewed as a make-or-break moment for the process after months of talks led by Lord Frost and the EU's Michel Barnier failed to reach an overall agreement.

Downing Street said Lord Frost would return to London later on Tuesday to discuss the remaining differences in reaching a free trade deal with Mr Johnson.

Then "over the course of the coming days" the PM will go to Brussels, Number 10 said, though no meetings are planned with the leaders of either France or Germany.

On the likelihood of a deal, Mr Johnson said: "We are always hopeful but there may come a moment when we have to acknowledge that it is time to draw stumps, and that is just the way it is.

"There are just limits beyond which no sensible, independent government or country could go and people have got to understand that."

He again insisted the UK will "prosper mightily" with or without a trade deal with the European Union, despite warnings from the Office for Budget Responsibility and the governor of the Bank of England about the impact.

Mr Johnson said he is prepared to keep trying for a deal right up until the wire, but added that a time must come when both sides accept no more progress can be made.

Asked whether his forthcoming meeting with President von der Leyen could achieve a breakthrough, the PM said he has to be "optimistic" but "it's looking very, very difficult at the moment".

"We will do our level best, but I would just say to everybody be in good cheer, there are great options ahead for our country on any view.," Mr Johnson added.

He added: "We will see where we get to in the course of the next two days, but I think the UK Government's position is that we are willing to engage at any level, political or otherwise, we are willing to try anything.

No day has yet been fixed for Mr Johnson's meeting with Ms von der Leyen, but it is expected later this week and follows a lengthy telephone call on Monday.

Ahead of the meeting, a senior government source said: "Talks are in the same position now as they were on Friday. We have made no tangible progress. It’s clear this must now continue politically.

"While we do not consider this process to be closed, things are looking very tricky and there’s every chance we are not going to get there."

Leaders of the EU's 27 member states are due to gather in Brussels on Thursday for a two-day summit, potentially giving political impetus for a deal.

Brexit trade talks - the sticking points at a glance:

- Fishing rights: The UK wants total control over its own fishing waters after the Brexit transition period ends, with a 12 mile exclusion zone around the British Isles banning all foreign vessels. The EU wants the UK to stick to the Common Fisheries Policy, an EU agreement which gives member nations the rights to fish in European waters - more here.- Level Playing Field: This is a concept all EU nations agree to, which ensures member nations cannot undercut others by setting their own rules on issues such as the environment, taxation and state aid. The EU says a zero-tariff trade deal is dependent on the UK agreeing to a level playing field. The UK disagrees, saying a fundamental aspect of Brexit is that the UK will be able to set its own rules.- Governance of a deal: It's likely that any trade deal will eventually result in disputes. The EU wants the European Court of Justice to be the final authority in ruling over disputes. The UK says the ECJ should have no role and final decisions should be made by a bespoke arbiter.