Talks on a post-Brexit trade deal are expected to continue on Monday, a UK Government source has said.
The source said the discussions in Brussels had been “difficult” and that “significant differences” remained between the two sides on fisheries and state aid rules.
“Teams have been negotiating throughout the day and expect to continue tomorrow. Talks remain difficult and significant differences remain,” the source said.
“We continue to explore every route to a deal that is in line with the fundamental principles we brought into the negotiations.”
MEPs had said they need to see the terms of any agreement by Sunday evening if they are going to be able to ratify it before the end of the Brexit transition period on December 31.
However, it is thought EU leaders could provisionally sign off on a deal if the talks go on beyond that point, with formal ratification taking place in the new year.
France’s European affairs minister, Clement Beaune, suggested on Saturday that Sunday was unlikely to prove to be a hard deadline.
“It would be normal not to say ‘Well it’s Sunday evening so let’s wrap it and sacrifice everything’,” he was quoted as saying by the Guardian website.
“It may be hard and sometimes tough to understand, but it’s necessary to take the time and, at any rate, not to sacrifice our interests under the pressure of a calendar.”
On Friday, Prime Minister Boris Johnson said the negotiations were proving “difficult” and called on the EU to “see sense” and to bring something new to the table.
Meanwhile in the UK, MPs are on standby to return to Westminster from their Christmas break if an agreement can be struck in the final days of the year.
As well as being ratified by Europe, any Brexit deal must also be approved by the Houses of Parliament.
Both sides have acknowledged that significant differences still have to be overcome if there is to be a breakthrough.
After months of sparring over the “level playing field” rules to ensure neither side can unfairly compete with the other on environmental standards, workers’ rights or state subsidies, and the legal mechanisms to govern any deal, the final hurdle to be overcome appears to be fisheries.
While the fishing industry accounts for only a tiny proportion of the EU and UK economies it carries huge political resonance on both sides of the Channel.
While the UK says that it is entitled as an independent sovereign nation to take control of its waters, countries like France are determined to defend their fishermen who would lose their livelihoods if they could no longer fish in British waters.
If there is no deal by December 31, the UK will leave the single market and customs union and begin trading with the EU on World Trade Organisation terms – with the imposition of tariffs potentially leading to higher prices in the shops.
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.
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.