Teetering on the brink of a no-deal Brexit departure, Britain and the European Union stepped back from the void Sunday and agreed to continue trade talks, although both downplayed the chances of success.
British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen ditched a self-imposed deadline and promised to “go the extra mile” to clinch a post-Brexit trade agreement that would avert New Year’s chaos and costs for cross-border commerce.
“Where there’s life, there’s hope,” said Johnson, offering little else as rationale to keep on with talks that have struggled to make headway for most of the year and need to be finished before Jan. 1, when the transition period for Britain, which left the EU last January, ends.
With hundreds of thousands of jobs and tens of billions in trade at stake, von der Leyen said after her phone call with Johnson that “we both think it is responsible at this point in time to go the extra mile.”
All this, she added, “despite the exhaustion after almost a year of negotiations and despite the fact that deadlines have been missed over and over.”
U.K. and EU negotiators were still talking at EU headquarters on Sunday, with less than three weeks to go until the U.K. leaves the economic embrace of the 27-nation bloc.
But their leaders failed to present visible progress on any of the outstanding issues of fair-competition rules, mechanisms for resolving future disputes and fishing rights.
Johnson said the “most likely” outcome was that the two sides wouldn’t reach a deal and would trade on World Trade Organization terms, with the tariffs and barriers that would bring.
European Council President Charles Michel warned there could not be a deal “at any price, no. What we want is a good deal, a deal that respects these principles of economic fair play.”
It remains unclear how much of the gap between the two sides is negotiating tactics and how much reflects fundamental differences that make a deal unlikely.
“Negotiations need to have a purpose,” said Fabian Zuleeg of the EPC think tank. “We just spent another 4-5 days not moving forward, so adding more days doesn’t really help.”
He said the extension of talks just seems an indication “that neither side wants to be blamed for no deal.”
It has been four and a half years since Britons voted narrowly to leave the EU and — in the words of the Brexiteers’ slogan — “take back control” of the U.K.’s borders and laws.
It took more than three years of wrangling before Britain left the bloc’s political structures on Jan. 31. Disentangling economies that have become closely entwined as part of the EU’s single market for goods and services took even longer.
The U.K. has remained part of the single market and customs union during an 11-month post-Brexit transition period. That means so far, many people will have noticed little impact from Brexit.
On Jan. 1, it will feel real. New Year’s Day will bring huge changes, even with a deal. No longer will goods and people be able to move between the U.K. and its continental neighbors.
Exporters and importers face customs declarations, goods checks and other obstacles. EU citizens will no longer be able to live and work in Britain without a visa — though that doesn’t apply to the more than 3 million already there — and Britons can no longer automatically work or retire in the EU.
There are still unanswered questions about significant areas, including security cooperation between the two sides and access to the EU market for Britain’s huge financial services sector.
Without a deal, the disruption would be far greater. The U.K. government has acknowledged a chaotic exit is likely to bring gridlock at Britain’s ports, temporary shortages of some goods and price increases for staple foods. Tariffs will be applied to many U.K. goods, including 10% on cars and more than 40% on lamb, hurting the U.K. economy as it struggles to rebound from the impact of the coronavirus pandemic.
Johnson insists the U.K. will still “prosper mightily” on those terms but British businesses have been sounding the alarm with increasing urgency.
“The 11th hour has passed and every passing moment of uncertainty makes it harder for businesses to prepare effectively for Jan. 1,” said Helen Dickinson, chief executive of the British Retail Consortium.
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, so is demanding strict “level playing field” guarantees in exchange for access to its market.
The U.K. government claims the EU is trying to bind Britain to the bloc’s rules and regulations indefinitely, rather than treating it as an independent nation.
Johnson on Sunday repeated his willingness to go to Brussels or other European capitals if it would help seal a deal. His attempts to speak directly to key national leaders including French President Emmanuel Macron and German Chancellor Angela Merkel have been rebuffed by the EU, which says the Commission speaks for all EU nations in the Brexit negotiations.
Britain’s belligerent tabloid press urged Johnson to stand firm, and floated the prospect of Royal Navy vessels patrolling U.K. waters against intruding European fishing vessels.
But others, in Britain and across the EU, urged the two sides to keep talking.
“Every opportunity to still reach an agreement is highly welcome,” said Merkel.
Spanish Foreign Minister Arancha Gonzalez Laya said a no-deal Brexit would be a “double whammy” for economies already battered by the pandemic.
Irish Prime Minister Micheal Martin, whose economy is more entwined with Britain’s than any other EU nation, said “even at the 11th hour, the capacity in my view exists for the United Kingdom and the European Union to conclude a deal that is in all our interests.”
Jill Lawless reported from London. John Leicester contributed from Paris