U.K.-EU negotiators will resume talks on a Brexit trade deal after a dinner summit Wednesday night between Prime Minister Boris Johnson and European Commission President Ursula von der Leyen, but Britain said “very large gaps” remain between the two sides.

Johnson’s office said the two leaders set Sunday as the deadline to decide whether there will be an agreement, or a tumultuous no-deal split at the end of the month.

Johnson flew to Brussels in hopes that top-level political talks could put new momentum into talks that are stuck on issues including fishing rights and competition rules. But there was no breakthrough at the three-hour meeting that, which Downing St. described as “frank.”

Britain’s foreign minister said Thursday that negotiations on a trade deal with the European Union will reach a “moment of finality” this weekend, with both sides assessing chances of an agreement as slim. Foreign Secretary Dominic Raab said the Sunday deadline set by Britain and the EU for a decision was final – though he added “you can never say never entirely.”
The European Commission on Thursday said it was proposing ways to avoid air and road disruption if Britain and the EU fail to agree on a trade deal by the end of this year, as well as a one-year deal on fisheries. Basic connections by road and air would continue for six months, the Commission said in a statement, according to Reuters. On fishing, the Commission said it proposed "a regulation to create the appropriate legal framework until 31 December 2021, or until a fisheries agreement with the UK has been concluded – whichever date is earlier – for continued reciprocal access by EU and UK vessels to each other's waters after 31 December 2020."
Britain left the EU on Jan. 31 but remains in its economic structures until the end of the year. That means a serious economic rupture on Jan. 1 that could be chaotic if there is no trade agreement. A no-deal split would bring tariffs and other barriers that would hurt both sides, although most economists think the British economy would take a greater hit because the U.K. does almost half of its trade with the bloc. Months of trade talks have failed to bridge the gaps on three issues – fishing rights, fair-competition rules and the governance of future disputes.
While both sides want a deal, they have fundamentally different views of what it entails. The EU fears Britain will slash social and environmental standards and pump state money into U.K. industries, becoming a low-regulation economic rival on the bloc’s doorstep – hence the demand for strict “level playing field” guarantees in exchange for access to its markets.
The U.K. government sees Brexit as about sovereignty and “taking back control” of the country’s laws, borders and waters. It claims the EU is trying to bind Britain to the bloc’s rules indefinitely.