The UK’s top negotiators “remain hopeful” of agreeing a post-Brexit trade deal in the coming days but fisheries is one of the key areas still under intense discussion, says Downing Street.
Officials are optimistic an agreement can be reached as early as this week after the EU’s chief negotiator, Michel Barnier, told ambassadors and MEPs that Boris Johnson had made a key concession on competition.
However, the pathway to agreement remains “very narrow” and talks could go on past Christmas, and possibly right to the wire, after both sides refused to set a new deadline following the decision to continue negotiations past Sunday.
Mr Barnier warned nations should prepare themselves for a “short no-deal period” if a last-minute agreement has to be ratified early in the new year, with talks over fishing appearing to move backwards in recent days.
The prime minister’s official spokesman admitted no-deal remains a possibility but stressed the UK would “continue to work to reach a free-trade agreement”.
He said: “We remain hopeful of reaching an agreement, that’s what we’ve been working for over the course of this year. Our negotiating teams remain in Brussels today, negotiating with their counterparts to bridge the gaps that still remain.”
Mr Barnier updated diplomats from the 27 EU states about the progress made before resuming negotiations with his UK counterpart, Lord Frost.
He said Mr Johnson’s acceptance of the need to ensure fair competition for British and European businesses had unlocked the talks and a deal could be agreed in the “next few days” if a solution can be found to the row over Britain’s coastal waters.
Both sides risk having to trade on World Trade Organisation rules if an agreement cannot be reached by December 31, meaning tariffs would be introduced on imports.
Speaking at an event on Monday, EU Commission president Ursula von der Leyen said the “level playing field” – how far the UK can diverge from EU law and how any disagreements should be policed – was the “one and only important question” if the UK should continue to have access to the single market.
She said: “First of all, there is movement. That is good. We are talking about a new beginning with old friends. We are on the very last mile to go but it is an essential one. We want a level playing field, not only at the start but also over time.
“This is the architecture we are building. We are fine about the architecture itself but the details in it, do they really fit? These are crucial points because it is a matter of fairness, fair competition, and we want to ensure that.”
The EU remains concerned UK businesses could gain an unfair advantage over those inside the trading block if the UK is granted tariff-free access to goods while setting its own product standards and employment rights.
Mrs von der Leyen added: “They have either to play by our rules, because this is a matter of fairness for our companies… or the choice is there is a price on it, and the price is border and tariffs.”