EU LEADERS France’s Emmanuel Macron and Germany’s Angela Merkel – have been told the EU is unlikely to get a trade deal with the UK by Sunday’s deadline.
European Commission President Ursula von der Leyen told the bloc’s 27 leaders talks were ‘difficult’.
The UK stops following EU trade rules on 31 December.
Weeks of intensive talks between officials have failed to overcome obstacles in key areas, including competition rules and fishing rights.
Von der Leyen, according to EU officials, struck a downbeat note about the chances of success, saying the ‘main obstacles’ standing in the way of a deal – disagreements over fair competition rules, how a deal would be enforced and fishing quotas – remained in place.
The EU states that it is determined to prevent the UK from gaining an unfair competitive advantage from having tariff-free access to its markets whilst also having the ability to set its own national standards.
It insists product standards, employment rights and business subsidies, including state aid, must be agreed with the EU, and cannot be pursued without the EU’s agreement.
Von der Leyen said the UK would not be required to ‘follow’ every new rule or product standard imposed by the EU after 31 December, but if the UK decided to go its own way on some rules, there would be a price to pay with possible tariffs.
‘We have repeatedly made clear to our UK partners that the principle of fair competition is a pre-condition to privileged access to the EU market,’ she said.
‘This is not to say that we would require the UK to follow us every time we decide to raise our level of ambition, for example in the environmental field,’ she added.
‘They would remain free – sovereign, if you wish – to decide what they want to do. We would simply adapt the conditions for access to our market accordingly, the decision of the UK, and this would apply vice versa.’
Macron said the EU and UK must learn to live ‘side by side’ harmoniously, while complying with EU decisions.
PM Johnson has said he couldn’t accept the UK remaining ‘locked’ into the EU’s legal system, or being punished if it diverged from EU standards.
Culture Secretary Oliver Dowden suggested the EU’s unwillingness to compromise on these matters was ‘frustrating’ as the two sides were ‘90% of the way there’.
He suggested it would not be in either side’s interest to tax products such as beef, lamb or car parts.
Von der Leyen concluded that ‘one way or the other, in less than three weeks it will be new beginnings for old friends’.