After meeting for a last-ditch dinner on Wednesday night, Boris Johnson and European Commission president Ursula von der Leyen have agreed to let talks on a post-Brexit trade deal continue until Sunday.
As the clock counts down rapidly to midnights on December 31, both the PM and von der Leyen said “very large gaps” remain between the two sides.
The deadlock comes down to persistent sticking points between London and Brussels over the drawn-out Brexit process.
After years of disagreement, here are three major stumbling blocks still complicating the path to a trade deal.
Fishing
Fishing is an industry responsible for 12,000 jobs on around 6,000 vessels in the UK.
The PM has insisted that no British prime minister could accept EU demands to continue to maximise access to UK waters for its fishing fleets after the Brexit transition period expires on December 31.
As far as the government is concerned, the UK is now an independent coastal state and should be able to prioritise its own boats.
But that negotiation is complicated by the fact that most fish caught by the UK’s fishing industry is sold to Europe, so Britain needs to maintain access to EU markets. The UK exported 333 thousand tonnes of fish to members of the EU in 2019 with a value of £1.34bn, according to figures from the Marine Management Organisation (MMO).
Johnson told the Commons ahead of his dinner with von der Leyen on Wednesday: “They (the EU) are saying that the UK should be the only country in the world not to have sovereign control over its fishing waters.
“I don’t believe that those are terms that any prime minister of this country should accept.”
The UK government’s allowing of other countries to fish in its waters actually predates its entry into the EU, with vessels from France, Belgium, Germany, Ireland and the Netherlands to fish inside the UK’s 12 nautical mile territorial zone up to six miles from the coast (and vice-versa) from 1964.
The ‘level playing field’
The so-called “level playing field” rules are intended to ensure businesses on one side of the UK/EU divide do not gain an unfair advantage over those on the other side.
In exchange for continuing access to the single market, the EU is seeking a high degree of alignment by the UK with its standards on workers rights, the environment and particularly state aid for businesses.
The British deny they want to undercut EU measures, but say the point of leaving is for the UK to be able to set its own standards.
Johnson said: “Our friends in the EU are currently insisting that if they pass a new law in the future with which we in this country do not comply or don’t follow suit, then they want the automatic right to punish us and to retaliate.”
Level playing field rules play a part in almost every trade deal, and as the BBC points out, the closer two parties are, the tighter these rules usually have to be.
With the UK just miles from the coast of mainland Europe, and already deeply intertwined with EU markets, the EU therefore say that the trade agreement with the UK necessarily has to be different from other ones made with countries such as Japan or Canada.
Governance
Another major sticking point is determining how future rules will be enforced – and what the consequences would be if they were broken.
The EU wants powers to retaliate against UK breaking one rule by hitting back via another, which could mean, for example, imposing tariffs. As part of this, the UK would be able to do the same in return.
But the British have been adamant that the UK is an independent sovereign state and cannot accept the jurisdiction of the European Court of Justice (not to be confused with the European Court of Human Rights, or EHCR, which the UK’s relationship with has not been changed by Brexit).