UK and EU negotiators will begin a final push to salvage chances of a post-Brexit trade deal after Downing Street warned the gaps between the two sides remain “very large”.
Boris Johnson and European Commission president Ursula von der Leyen held crunch talks over dinner in Brussels on Wednesday aimed at breaking the deadlock, yet key differences prevail.
The leaders agreed to make a “firm decision” about the future of the talks by the end of the weekend, and asked their chief negotiators Lord Frost and Michel Barnier to reconvene in the city on Thursday.
But in a statement following three hours of dinner and discussions in Brussels, a senior Number 10 source said it was “unclear” whether the differences between the two sides could be bridged.
They said: “The PM and VDL (von der Leyen) had a frank discussion about the significant obstacles which remain in the negotiations.
“Very large gaps remain between the two sides and it is still unclear whether these can be bridged."
The PM and VDL agreed to further discussions over the next few days between their negotiating teams.
“The PM does not want to leave any route to a possible deal untested. The PM and VDL agreed that by Sunday a firm decision should be taken about the future of the talks.”
A Downing Street spokesman added that “any agreement must respect the independence and sovereignty of the UK”.
Boris Johnson leaves the European Commission after dinner with Ursula von der Leyen
Mrs von der Leyen said the negotiating teams should “immediately reconvene” to try to resolve the “essential issues” but stressed the positions remained “far apart”.
She said in a statement: “We had a lively and interesting discussion on the state of play across the list of outstanding issues.
“We gained a clear understanding of each other’s positions. They remain far apart.
“We agreed that the teams should immediately reconvene to try to resolve these essential issues. We will come to a decision by the end of the weekend.”
It was hoped that progress at a political level between Mr Johnson and Mrs von der Leyen could pave the way for more talks between Lord Frost and Michel Barnier.
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.
But the statements from both sides suggested that while further discussions would be held, substantial movement on the key issues had not been made.
Mr Johnson and Mrs von der Leyen discussed the potential trade deal over a three-course dinner featuring scallops and turbot.
Negotiations have faltered on fishing rights, among other issues, and the Commission’s menu will be seen as a pointed gesture by some but a sign that it has a sense of humour by others.
Other outstanding differences include the “level playing field” measures aimed at preventing the UK undercutting the EU on standards and state subsidies, and the way that any deal would be governed.
Before leaving London, Mr Johnson told MPs that no prime minister could accept the demands the EU is making, though insisted a trade deal was still possible.
Their meeting came ahead of a European Council summit on Thursday where Mrs von der Leyen is expected to debrief the leaders of the 27 member countries on the state of play with the negotiations.
Just three weeks remain until the current transitional arrangements expire.
Failure to reach agreement would see tariffs imposed on UK exports to the EU, the country’s biggest trading partner, and could also increase bureaucracy.
The Office for Budget Responsibility has suggested that a no-deal outcome could wipe 2% off gross domestic product, a measure of the size of the economy, in 2021.
The Bank’s governor Andrew Bailey has warned the long-term damage caused by a no-deal situation would be worse than the economic hit from coronavirus.