Boris Johnson is unable to break the Brexit deadlock in Brussels

LONDON – Britain and the European Union were unable to break the deadlock in the critical negotiations on a post-Brexit trade agreement on Wednesday and, given the continuing divisions between them, set a new deadline for Sunday to decide on the future of the negotiations.

The dinner meeting between British Prime Minister Boris Johnson and Ursula von der Leyen, the bloc’s executive body, the president of the European Commission, ended without significant progress, major gaps remained between the two sides and there was no clear way to bridge them.

Wednesday’s three-hour meeting was set up with the goal of breaking the deadlock in the trade talks for months. Negotiations continued to stall, just three weeks before Britain completed the final phase of Brexit, leaving the European Union’s economic territory at the end of the month.

But Ms von der Leyen said in a statement that despite a “lively and interesting debate”, the two sides ’positions are“ far apart ”.

“We agreed that the teams should reunite immediately to try to resolve these fundamental issues. We will make a decision by the end of the weekend, ”he added.

The announcement of a new Sunday deadline still holds hope for the final push to conclude the elusive trade agreement that many analysts had hoped for theatrical progress shortly before the December 31 deadline. Discussions are now continuing this week on a final agreement that could shape the shape of Britain’s relationship with continental Europe for decades to come.

But the lack of progress at Wednesday’s dinner is another failure in negotiations that have been stalled for months.

Economic and political logic suggests that the British Prime Minister desperately needs an agreement. But after campaigning for Brexit on the basis of regaining national sovereignty, Mr. Johnson faces the difficult task of reaching agreements acceptable to both the bloc and Brexit supporters.

European Union leaders will meet in Brussels on Thursday to discuss other important issues on their agenda, such as the next seven-year budget, the coronavirus recovery fund, the rule of law and possible sanctions against Turkey. European leaders did not plan to discuss Brexit, although Ms von der Leyen is expected to inform them of her talks with Mr Johnson.

Had the Brexit talks collapsed on Wednesday night, the political focus on both sides would have shifted to how to deal with the failure to close the deal and how to curb the January disruption when a sudden change in trading conditions could leave ports blocked and trucks stuck.

But German Chancellor Angela Merkel was still cheerful on Wednesday, saying “there is still a chance of an agreement”. He emphasized, however, that the European Union would not accept any agreement “if there are conditions on the part of the British side that we cannot accept” or that jeopardize the single market.

Given the complexity and acute political sensitivity of the deal, neither party raised the expectation that a breakthrough could be achieved at Wednesday’s pumpkin dinner and, in a manner appropriate to fishing rights negotiators, scallops and diamonds, prior to the meeting.

Irish Foreign Secretary Simon Coveney has expressed confidence that there will be some “thin” deal, minimal agreement, but always the last hurdles are the hardest. “I think the negotiating teams and senior politicians will find a way to close the deal,” he said. “But we’re in a difficult situation right now when we try to close.”

But even Mr Coveney, who is a good barometer of European emotions, is getting gloomier. On Monday night, after a meeting of the bloc’s foreign ministers, he said the mood was shifting towards preparations for moving forward without a convention. “There is a lot of frustration on the EU side, not only within the EU negotiating team,” but also “among the member states,” Mr Coveney said.

One of the unresolved issues was resolved on Tuesday when London threatened to break the exit treaty – and violate international law – on how to enforce the rules on trade in goods between Britain and Northern Ireland.

Nevertheless, it remains difficult to address the main issues that prevented them from concluding a trade agreement: fishing rights, state aid rules and ‘level playing field’ provisions to ensure fair competition between British and European companies, and these enforcement mechanisms.

While access to fish stocks is a highly controversial political issue for Britain, France and other coastal European nations, the other issues are likely to be more difficult to resolve because they relate to the hypersensitive principles of sovereignty.

The biggest gap is in fair trade conditions because Brussels officials fear that Greater Europe’s economy on the verge of Europe could lead to lower labor or environmental standards in Britain, flooding the European market and undermining continental companies.

Mr. Johnson faces a dilemma on this issue. Negotiators in Brussels want the right to levy customs duties on imports if Britain deviates from European standards. Given that Britain claims that it does not generally intend to adopt lower standards, it may never be in such a situation. But if Britain does not conclude a trade agreement, it will definitely face tariffs.

Instead of being a dry and technical trade issue, Mr Johnson sees this as a European attempt to link Britain to the bloc’s future rulebook, trampling on the national sovereignty that was at the heart of his Brexit vision.

Mr Johnson told lawmakers on Wednesday that good business is still possible. But he added that if Britain fails to comply with future European rules, Brussels wants “automatic law punished and retaliated against”, adding that no British prime minister can accept such conditions.

Hardliners within his own party confirmed this argument, urging him not to compromise in discussions with Ms von der Leyen.

“The reality is that it’s all about sovereignty,” wrote Iain Duncan Smith, a former leader of the Conservative Party and a Brexit fan, in The Daily Telegraph. “It was clear from the start that while the UK wanted a trade agreement, the EU wanted to control us. Either the UK is sovereign or not. “

Nevertheless, the cost of exercising full sovereignty can be very high. If a trade agreement is not reached, pro-independence campaigners in Scotland could make good use of it, with a majority of voters opposing Brexit in the 2016 referendum. That would erase an additional 2 per cent of UK economic output while boosting inflation, unemployment and government borrowing, official forecasts said last month.

While the nations of Europe would suffer, none – with the exception of Ireland – could be hit as hard as Britain. Senior French officials, such as European Minister Clément Beaune, said France was ready to veto an unsatisfactory agreement, and Dutch officials suggested that EU chief negotiator Michel Barnier be very close to his talks on the “red lines” mandate. with regard to the permitted concessions for the conclusion of the agreement.

Ms Merkel stressed that Britain must strictly adhere to the bloc’s labor, environmental and fair competition rules and develop mechanisms to monitor possible agreements.

“We need to have a level playing field, not just for today, but for tomorrow or the day after, and to do that, we need to agree on how we can react if the other changes their legal position,” Ms Merkel said. said. “Otherwise, there will be unfair conditions of competition that we cannot ask of our companies.”

Europeans are adamant that the mandate will not change and that Mr Barnier trusts him. While European nations may have different priorities, their leaders say they will not break the solidarity they have shown so far, and their official role will only be to support any agreement reached by Mr Barnier – or to acknowledge that the negotiations have failed.

Although Thursday’s meeting was seen as an opportunity for European Union leaders to approve the Brexit trade agreement, some analysts believe it is still possible to agree and ratify an agreement in the last days of the month.

How this is resolved – the extent to which Britain must comply with the rules set out in Brussels and how to resolve any disputes that remain – remains at the heart of the continuing differences. But selling any deal that arises is a completely different matter.

Stephen Castle from London and Steven Erlanger from Brussels reported.