European Union and U.K. negotiators in charge of finding a post-Brexit compromise resumed in-person talks this week, but the result remained the same, with no progress achieved on a range of key issues, preventing a new trade agreement from being sealed.
Discussions ended Thursday, a day earlier than planned, as a meeting between the teams' chief negotiators initially slated for Friday was taken off the agenda.
Following four days of negotiations in Brussels, the EU's chief negotiator Michel Barnier said “serious divergences remain." Despite the roadblocks, he said an agreement remains possible before the year-end deadline.
Britain's chief negotiator, David Frost, said the talks had been “comprehensive and useful” but had “underlined the significant differences that still remain between us on a number of important issues.”
There is a good agreement to be reached with the European Union on post-Brexit trading terms, but if that can't be achieved, there are other very good options, British Prime Minister Boris Johnson told LBC radio on Friday. Johnson said he was a bit more optimistic than Barnier, but said that if no deal was struck, an "Australia-style" arrangement would be a "very good option."
The talks this month are being held in a more limited format than earlier sessions, in hopes that a more personal encounter can deliver a breakthrough. The talks will resume on Monday in London in the same restricted format, with a full session, involving hundreds of negotiators, planned for July 20 in the U.K. capital.
Britain left the EU on Jan. 31 and a post-Brexit transition period during which it still benefits from de facto EU membership comes to an end on Dec. 31.
Without a new agreement, the two sides would see ties reduced to minimum standards set by the World Trade Organization (WTO) with high tariffs, quotas and serious disruptions to business.
London is pushing hard to get agreement on the broad outlines of a trade deal this summer to give businesses clarity well before the end of the year.
The EU is less pressed for time and believes that necessary ratification by the European Parliament and other member states would require a deal to be done by late October.
German Chancellor Angela Merkel on Wednesday said the EU must prepare for the possibility that the talks could fail. Her unusually hard stance came as Germany took over the EU's rotating presidency in which achieving a deal is a priority.
Over the next weeks, Barnier and Frost are hoping to unknot some of the most contentious issues that have not changed since talks began in March. In his statement, Barnier asked that Europe's positions to "be better understood and respected in order to reach an agreement."
These include guarantees of fair competition demanded by the EU in fiscal, social or environmental matters to avoid the emergence of a low-regulation economy on Europe's doorstep. Other sore points are the role of the EU Court of Justice, access to British waters for European fishermen and the agreement's actual form. The Europeans want a broad deal covering all areas of the relationship that should be negotiated in parallel, while London says a simple trade agreement will do for now.