Hopes were growing in London and Brussels on Sunday that a post-Brexit trade deal could be saved, but there were warnings that the EU and UK were staying ‘distant’ on key issues and that talks could go until the end.
Boris Johnson, British Prime Minister, and Ursula von der Leyen, President of the European Commission, agreed on Sunday in a “constructive” call to “go the extra mile” in search of an agreement, with both sides reporting progress in negotiations.
But no deadline has been set for the negotiations to be concluded, with UK officials admitting they could drag on until Christmas. A deal must be in place before the UK transition deal ends on January 1.
“We have time on our side to ratify – we can go until Christmas,” a senior British official said. EU diplomats have confirmed that talks will not end in a day or two as the tightrope policy continues.
British MPs have been told to be ready the week before Christmas to pass the legislation needed to enact a deal, while the European Parliament is also ready for an emergency sitting.
The decision to continue discussions beyond the Sunday “deadline” came when the two sides explored ways to resolve the main sticking point: designing a system to meet the EU’s demands for fair trade competition.
Boris Johnson told broadcasters the two sides remained “very distant” on key issues – supposedly referring to the so-called level playing field and fishing – but the EU’s position was changing in London.
Dominic Raab, the British Foreign Secretary, said on Sunday ahead of the decision to extend negotiations that the EU would have to cross “a fairly high bar” by showing that it was ready to compromise to make it worthwhile .
Mr Raab also alluded to the BBC Andrew Marr program that lawyers could pour into a final deal and that there could be “creative outlines in the drafting” to help get a deal down the line.
EU officials acknowledged that there had been progress in the talks, with one describing “gradual progress on all fronts”, although Mr Johnson warned that the lack of agreement was always “the most likely outcome”.
Michel Barnier, chief negotiator of the EU, will inform the ambassadors of the EU-27 and MEPs on Monday of the state of play. Discussions with David Frost, his British counterpart, will continue in Brussels on Monday.
Those briefed on the negotiations said the two sides were gradually moving forward in their discussions on how to design a mechanism that preserving a “level playing field” between businesses on both sides, even as EU and UK rules in areas such as environmental law potentially diverge in the years to come.
Brussels pushed for a system that would allow each party to request consultations and ultimately introduce tariffs if they feared their companies would be at a competitive disadvantage.
The UK has dismissed previous iterations of the idea as an affront to sovereignty, but over the weekend changes were discussed in an attempt to address its concerns. The talks focused on issues such as the role of arbitration and the criteria for determining economic damage.
“They wanted to set the bar much too low,” said a British official.
Last week, Boris Johnson said there was a “strong possibility” that negotiations would fail, with briefings which the Royal Navy was on standby stop EU vessels operating in UK waters in the event of no deal.
Mr Johnson and Mrs von der Leyen held an uncomfortable meeting in Brussels last week, fueling feelings of impending failure, but on Sunday the mood between the two was called “cordial” by EU officials.
Officials briefed on recent negotiations between Mr Barnier and Lord Frost say progress has been made on a level playing field, but difficulties persist on the issue of access to fisheries.
Mr Johnson said on Sunday he would have liked to speak directly to EU leaders – including French President Emmanuel Macron and Angela Merkel, German Chancellor – but had been informed that Ms von der Leyen was negotiating for the 27 Member States.