British prime minister Boris Johnson and European Commission president Ursula von der Leyen said in a joint statement on Monday that sealing a new trade deal was currently impossible “due to remaining differences on critical issues”.
“We asked our chief negotiators to prepare an overview of the remaining differences to be discussed in person in the coming days,” they said.
Mr Johnson will go to Brussels in the coming days in an attempt to bridge significant differences in Brexit talks over the so-called level playing field, governance and fisheries issues.
“We agreed that the conditions for finalising an agreement are not there due to the remaining significant differences on three critical issues: level playing field, governance and fisheries,” Mr Johnson and Dr von der Leyen said.
“We asked our Chief Negotiators and their teams to prepare an overview of the remaining differences to be discussed in a physical meeting in Brussels in the coming days.”
At around 6pm, the pair took a “break” from a telephone call which started at 4pm.
The AFP news agency said the leaders had paused talks in which they were seeking to assess whether a post- Brexit trade deal can be salvaged.
Mr Johnson asked for the break, according to reports.
Earlier, the European Union’s chief negotiator Michel Barnier reportedly told MEPs the deadline for post-Brexit trade deal negotiations succeeding is Wednesday.
But the UK was saying it is prepared to continue for “as long as we have time available”, Number 10 has said, as talks aimed at breaking the deadlock continue.
Mr Boris Johnson’s official spokesman said that although time was in “very short supply”, Britain would stick at the discussions if an agreement was still possible.
The prime minister’s spokesman told a Westminster briefing: “Time is obviously in very short supply and we’re in the final stages, but we’re prepared to negotiate for as long as we have time available if we think an agreement is still possible.”
He said “significant differences” remain — including on fishing rights — which will be discussed in talks on Monday, but ruled out negotiations continuing after this year.
Mr Barnier and his UK counterpart Lord Frost are negotiating in Brussels in a bid to break the stalemate — with just over three weeks until the end of the transition period.
Meanwhile, British cabinet office minister Michael Gove met his counterpart on the UK-EU joint committee in Brussels, though the discussions are separate from the trade negotiations.
In an olive branch to Brussels, the British government said it was prepared to remove three controversial clauses from the UK Internal Market Bill relating to the Border.
In a statement, the British government said the UK and EU have “worked constructively together through the Withdrawal Agreement Joint Committee.
“Discussions continue to progress and final decisions are expected in the coming days. If the solutions being considered in those discussions are agreed, the UK Government would be prepared to remove clause 44 of the UK Internal Market Bill, concerning export declarations.
“The UK Government would also be prepared to deactivate clauses 45 and 47, concerning state aid, such that they could be used only when consistent with the United Kingdom’s rights and obligations under international law.”
It comes after Mr Barnier was said to have given a “downbeat” and “gloomy” assessment of progress in reaching a post-Brexit trade deal in an update to ambassadors from the 27 member states earlier on Monday.
Taoiseach Micheál Martin said it would be a “significant failure” if no Brexit deal was agreed.
“Overall I think it is in the best interests of all concerned that a proper trade deal is agreed,” he said. “Our respective economies would suffer, unnecessarily in my view, in the event of a no-deal.”
Earlier, Minister for Foreign Affairs Simon Coveney said the prospects for a deal were gloomy.
“Having heard from Michel Barnier this morning really the news is very downbeat. I would say he was very gloomy and very cautious about the ability to make progress today,” he said.
“Unfortunately I’d like to be giving more positive news but at the moment these negotiations seem stalled. The barriers to progress are still very much in place.”
Mr Barnier was summoned to brief EU member states on Monday amid nervousness among some capitals that any deal should not give Britain a permanent economic advantage over its neighbours.
Mr Coveney said it was “absolutely not the case” that there had been progress on how to manage access to fishing stocks in British waters, contrary to some media reports late on Sunday. The two sides have been hamstrung with each only willing to cede about 20 per cent of current stocks to the other.
“The two really difficult issues of the level playing field and fair competition and the governance around that still seem to be very problematic,” Mr Coveney said. “There really was no progress made yesterday, that’s our understanding. So we’ve got to try to make a breakthrough at some point today.”
Amid the febrile mood surrounding the negotiations, British sources denied reports on Sunday that there had been a breakthrough on the thorny issue of future fishing rights.
Reports suggested they had agreed to a transition period for phasing in changes for access for EU boats to UK waters of between five and seven years.
However, a UK Government source said: “There’s been no breakthrough on fish. Nothing new has been achieved on this today.”
Amid the uncertainty, the pound was down 1.3 per cent against the dollar.
If there is no deal by the end of the Brexit transition period at the end of the month, then Britain will leave the single market and the customs union and begin trading with the EU on World Trade Organisation terms, with the imposition of tariffs and quotas. – PA