LONDON — Britain and the European Union warned Tuesday that the chance of a post-Brexit trade deal by a year-end deadline is slipping away, with just over three weeks until an economic rupture that will cause upheaval for businesses on both sides of the English Channel.
With negotiators deadlocked on key issues, officials downplayed the chances of a breakthrough when Prime Minister Boris Johnson heads to Brussels for face-to-face talks with European Commission President Ursula von der Leyen in the next few days.
There was progress on another thorny issue as the two sides announced they had reached agreement on how trade will work with Northern Ireland, the only part of the U.K. that shares a land border with the EU. Britain said as a result it would scrap plans to breach its legally binding divorce agreement with the bloc — a proposal that had infuriated the EU and helped sour the talks.
But on the bigger issue of a trade deal, Johnson said “the situation at the moment is very tricky.”
“But hope springs eternal. I will do my best to sort it out if we can,” he said.
German European Affairs Minister Michael Roth said “political will in London” was needed to secure a deal.
“Our future relationship is based on trust and confidence. It’s precisely this confidence that is at stake in our negotiations right now,” said Roth, whose country currently holds the EU’s rotating presidency.
Johnson and von der Leyen, head of the EU’s executive arm, spoke by phone Monday for the second time in 48 hours but failed to break the trade talks impasse. They said afterwards that “significant differences” remained on three key issues — fishing rights, fair-competition rules and the governance of future disputes.
The two leaders said they planned to discuss the remaining differences face to face “in Brussels in the coming days.”
No date was given for the meeting. The leaders of the EU’s 27 nations are holding a two-day summit in Brussels starting Thursday and are not keen for it to be overshadowed by Brexit.
EU chief negotiator Michel Barnier met his U.K. colleague David Frost in Brussels on Tuesday to take stock and “prepare the next steps,” Barnier said. Officials hope the meeting between Johnson and von der Leyen may break the logjam so negotiators can resume technical talks, though neither Britain nor the bloc appears willing to compromise on key demands.
The U.K. left the EU politically on Jan. 31 after 47 years of membership, but remains within the bloc’s tariff-free single market and customs union through Dec. 31. Reaching a trade deal by then would ensure there are no tariffs and quotas on trade in goods, although there would still be new costs and red tape for businesses.
Failure to secure a trade deal would mean 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.
EU officials suggested negotiations could continue past Jan. 1, even as the two sides tumbled into a no-deal trading relationship. But the U.K. appeared to rule that out.
“We have been clear that the future relationship needs to be concluded by the end of the year and negotiations won’t continue into next year,” said Johnson’s spokesman, Jamie Davies.
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 making demands it has not placed on other countries and is trying to bind Britain to the bloc’s rules indefinitely.
Trust and goodwill were further strained by British legislation that breaches the legally binding Brexit withdrawal agreement Johnson struck with the EU last year.
Britain claimed it needed the Internal Market Bill as an “insurance policy” to protect the flow of goods within the U.K. in the event of a no-deal Brexit. The EU saw it as an act of bad faith that could imperil Northern Ireland’s peace settlement.
On Tuesday, British Cabinet Minister Michael Gove and European Commission Vice-President Maroš Šefcovic said they had reached an agreement on how trade to and from Northern Ireland would work, whether or not there is an overarching U.K.-EU trade deal.
And both sides held out hope for a broad agreement.
“I do not want to acknowledge a failure. I think we still have a few days to negotiate,” French European Affairs Minister Clement Beaune told RMC radio.
Johnson said “there may come a moment when we have to acknowledge that it is time to draw stumps” — a cricket term that also means to announce that something is over — but that for the moment he remained hopeful.
Barnier, who has led the EU negotiating team through four and a half years of Brexit drama, urged calm.
“More than ever, the Brexit is a school of patience — even a university of patience,” he said.
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Lorne Cook reported from Brussels. Sylvain Plazy and Samuel Petrequin in Brussels contributed to this story
