UK Business Secretary Alok Sharma said Britain was “committed to reaching a deal”.
“But of course time is short and we are in a difficult phase. It cannot be denied,” he told the BBC. “There are a number of sensitive issues that still need to be resolved.”
UK officials tried to stifle hopes of an imminent deal, informing the media that the EU had delayed negotiations by making last-minute demands, a charge the bloc denies.
The UK left the EU earlier this year, but remains part of the 27-nation bloc’s economic embrace during an 11-month transition as the two sides try to negotiate a new free trade deal that will take effect on January 1. . Any agreement must be approved. by lawmakers in Britain and the EU before the end of the year.
The talks have dragged on as one deadline after another has been passed. First, the goal was an agreement by October and then in mid-November. On Sunday, Britain said the negotiations were in their final week. Now the two sides say they could be extended into the weekend or beyond.
The President of the European Council, Charles Michel, pointed out that it was not the first time that the deadlines had expired.
“We will see what will happen in the next few days,” he said in Brussels. “But the end of December is the end of December and we know that after December 31 we have January 1, and we know we need to be clear as soon as possible.”
A trade deal will allow goods to move between Britain and the EU without tariffs or quotas after the end of this year, although there will still be new costs and red tape for businesses on both sides of the English Channel.
If there is no deal, New Year’s Day will bring a major disruption, with the imposition of tariffs and other barriers to trade between the UK and the EU overnight. That will hurt both sides, but the burden will fall mostly on Britain, which does almost half of its trade with the EU.
Months of tense negotiations have produced an agreement on a number of issues, but serious differences persist over the “level playing field” – the standards the UK must meet to export to the bloc – and how future disputes are resolved. That’s key for the EU, which fears Britain will lower social and environmental standards and pump state money into UK industries, becoming a low-regulation economic rival at the bloc’s door.
But the UK government, which sees Brexit as all about “regaining control” of Brussels, is resisting restrictions on its freedom to set future economic policies.
Another sticking point is fish, a small part of the economy with enormous symbolic importance for Europe’s maritime nations. EU countries want their boats to be able to continue fishing in British waters, while the UK insists it must control access and quotas.
Fishing is especially important to France, which is viewed by many on the UK side as the EU nation most resistant to compromise and most prone to foiling a deal.
“If there was an agreement and it was not good … we would oppose it,” Clement Beaune, French deputy minister in charge of European Affairs, told Europe 1 radio. “France, like all its (EU) partners, has the right to veto.”
If there is no breakthrough on the weekend, next week will bring more complications. On Monday, Britain’s House of Commons will vote on a bill that gives Britain the power to violate parts of the legally binding withdrawal agreement it signed with the EU last year.
Prime Minister Boris Johnson’s government recognizes that the Internal Market Bill violates international law, and the legislation has been condemned by the EU, US President-elect Joe Biden, and dozens of British lawmakers, including many from the Johnson’s own Conservative Party.
The House of Lords, the upper house of Parliament, removed the law-breaking clauses from the legislation last month, but the Johnson administration says it will ask lawmakers to reintroduce them.
That would further embitter the talks, destroying any goodwill left between the two parties.