Raising hopes of a future relationship pact, the Brussels diplomat told EU27 ambassadors that progress had been made by both sides over the weekend on the so-called level playing field. The Frenchman said they had moved closer to a deal on enforcing the rules to ensure free and fair competition if Britain decides to not follow the EU’s regulations in the future. After a weekend of wrangling, Mr Barnier added that EU and UK officials are still yet to find an agreement over future controls over state subsidies for industry.
An EU diplomat said there had been “backtracking” by the British in the row over future access to our coastal waters for European boats.
The insider said Mr Barnier had described “some limited progress” in the discussions between the EU and UK over the weekend.
A UK source hit back at claims the country’s negotiators were “backtracking” in the discussions over fishing quotas.
“Just not true,” they said.
It is understood that British officials have dug their heels in on fish after offering minor concessions on the so-called “level playing field”.
The Reuters news agency reported one EU diplomat as saying Mr Barnier was “guarded” in his debrief to EU envoys on the state of play in the Brexit talks.
The source added: “Patient still alive … but keep the undertaker on speed dial.”
Ahead of the meeting, Mr Barnier told journalists a trade deal remains possible in the coming days.
He said: “We’ve only been negotiating for nine months, we’ve needed at least five years for all the previous agreements, we are going to give every chance to this agreement… which is still possible.
“A good, balanced agreement. That means two conditions which aren’t met yet. Free and fair competition… and an agreement which guarantees reciprocal access to markets and waters. And it’s on these points that we haven’t found the right balance with the British. So we keep working.”
UK Brexit envoy Lord Frost and Mr Barnier are due to meet again later this morning.
British officials spent more than 100 hours last week attempting to unpick the deadlock over fisheries and future common standards.
A deal could emerge later this week if both sides are able to overcome their differences.
UK officials believe they have a better chance of a breakthrough as Brexit talks continue this week.
They think that Brussels is now showing a “greater appreciation” of Britain’s position in negotiations.
The change came as Boris Johnson and Ursula von der Leyen, European Commission president, agreed that talks would go on, having previously suggested that yesterday would be the absolute deadline for progress.
Sources close to the talks said each side had made progress on the “level playing field” issue – a trade policy that prevents businesses in one country gaining a competitive advantage over those operating in other countries.
It is one of the key differences between the sides after the EU dropped its “ratchet clause” demand for Britain to be permanently tied to its regulations.
The two teams are now exploring how the UK can be allowed a “managed divergence” from the EU’s rulebook, so Eurocrats will not have free rein to slap Britain with punitive trade tariffs at short notice.
Negotiators were said to be working on a solution that would take future trade disputes to an independent committee if either side believed a rule change created an unfair competitive advantage.
Business secretary Alok Sharma said the EU and UK are still far apart, adding that Mr Johnson is committed to finding a Brexit trade deal.
Mr Sharma said: “We are of course apart on certain matters but … we don’t want to walk away from these talks.
“People expect us, businesses expect us in the UK to go the extra mile and that’s precisely what we’re doing.”