Britain and the European Union have scope to strike a trade deal but significant differences remain and real progress needs to be made to keep talking beyond the new deadline of Sunday, British foreign minister Dominic Raab has said.
Speaking to the BBC, Mr Raab said that while he could not rule out a further extension in the talks process, it was important to have “finality”.
He said: “I think it’s unlikely but I can’t categorically exclude it.
“It depends on the progress made between now and then.”
EU and UK 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”.
British Prime Minister Boris Johnson and European Commission president Ursula von der Leyen held crunch talks over dinner in Brussels yesterday 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 David Frost and Michel Barnier to reconvene in the city today.
However 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.
The source said that Mr Johnson and Ms 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 source added that the pair have agreed “to further discussions over the next few days between their negotiating teams” and that Mr Johnson “does not want to leave any route to a possible deal untested” and they “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”.
Ms 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.”
Ireland’s European Commissioner Mairead McGuinness said she believed “there is a deal to be done” with Britain in trade talks in the coming days but that it was impossible to predict if negotiations would be successful.
“I hope that we all get a Christmas present over the weekend. An early one. And that there is a trade agreement, because I think from all our sides … that would be the best possible outcome,” the Commissioner for Financial Services said.
Speaking on RTÉ’s Morning Ireland, Ms McGuinness said the “one glimmer of hope” in last night’s meeting was that Ms von der Leyen said “each side gained a clear understanding of each other’s position.”
She said “there will be renewed effort to negotiate and bridge what are significant gaps” adding that the meeting clarified “where the fault lines are”.
Ms McGuinness said she believes the level playing field is the main issue of the three yet to be resolved.
“I think on the issue of standards. I dare say that if there a was a change in our standards upwards, because we will not have any regression, I would think that British farmers will want to meet that standard to maintain access to the European market for their products.
“So I think that if you take some of the heat out of this discussion and look at the practical implications for businesses and individuals, a deal is much more important, particularly in the 11th hour.”
Ms McGuinness also said the resolving of the issue on the Withdrawal Agreement is important and “helps in a way towards a trade agreement.”
“It doesn’t unlock everything, but I think it does help take some of the emotion out of this very difficult conversation, but none of us at this point can predict an outcome.”
It was hoped that progress at a political level between Mr Johnson and Ms von der Leyen could pave the way for more talks between Mr Frost and Mr Barnier.
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 Ms 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 today where Ms 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.
Bank of England governor Andrew Bailey has warned the long-term damage caused by a no-deal situation would be worse than the economic hit from coronavirus.