The UK and EU are reportedly not on track to hit this week’s deadline to seal a post-Brexit trade deal.
Sources close to the negotiations told Reuters that talks are set to drag into next week, despite both sides’ commitment to “redouble” efforts, as disagreements on fisheries and state aid policy continues to prevent serious progress.
EU chief negotiator Michel Barnier is in London this week to conduct intensive Brexit negotiations with his UK counterpart Lord David Frost.
Barnier said on Monday prior to the meeting that there were three keys to “unlocking” a deal.
He said: “Respect of EU autonomy and UK sovereignty, with effective governance and enforcement mechanisms between international partners.
“Robust guarantees of free and fair trade and competition based on shared high standards, evolving coherently over time.
“Stable and reciprocal access to markets and fishing opportunities in the interest of both parties.”
Boris Johnson, who spoke to European Commission President Ursula von der Leyen on Saturday, said on Sunday “the broad outlines are pretty clear” and that the EU chief “totally agrees with me”.
A weekend statement from Downing Street also said that “significant differences” remained between the two sides including “the so-called level playing field and fish”.
State subsidy regulations, which are a part of the level playing field talks, has been one of the largest barriers to a deal.
The EU wants the UK to mirror its regulatory regime for business subsidies, and other things like labour and environmental laws, in return for zero tariff trade.
However, the UK has made it clear that it does not want to be locked into EU state aid rules and wants to be able to have greater control of fiscal policy.
Brussels also started negotiations by demanding EU countries retain the same fishing rights to UK waters as they currently have, which UK negotiator David Frost has said is untenable.