Prime Minister Boris Johnson headed to Brussels on Wednesday, with hopes for a post-Brexit trade deal hanging on crisis talks with EU chief Ursula von der Leyen.
Johnson’s dash back to the city where he made his name as an EU-bashing newspaper reporter marks the last chance of a breakthrough before Britain leaves the EU single market.
Talks are blocked over the issue of fair competition, with Britain refusing to accept a mechanism that would allow the EU to retaliate swiftly if UK business regulations change in ways that put European firms at a disadvantage.
EU negotiator Michel Barnier and his UK counterpart David Frost have narrowed the gaps over eight months of talks but London insists it will reclaim full sovereignty at the end of the year after half-a-century of close economic integration.
If Britain leaves the EU single market in three weeks without a follow-on Free Trade Agreement (FTA) the delays that travellers and freight will face at its borders with the European Union will be compounded by import tariffs that will drive up prices.
“I hope we will secure a FTA,” said senior UK minister Michael Gove, who with Johnson led the “leave” campaign in the 2016 Brexit referendum.
But he warned that if there is no deal Britain would take steps “to make sure British businesses are competitive as possible”.
In Berlin, Germany’s Chancellor Angela Merkel said there was still a chance for a deal.
But she warned: “We must not endanger the integrity of the common market.”
Johnson spoke to Von der Leyen on Monday by telephone to secure the last chance dinner invitation after negotiations between Barnier and Frost broke off without agreement.
He will travel by plane and arrive late Wednesday for talks at the Berlaymont, the EU building he once wrongly reported was scheduled for demolition when he covered Brussels as a newspaper journalist in the early 1990s.
But officials on both sides expressed pessimism ahead of the last-ditch encounter.
“I am always hopeful, but I have to be honest with you, the situation at the moment is tricky,” Johnson said as he toured a London hospital on Tuesday.
“Our friends have to understand the UK has left the EU to exercise democratic control. We are a long way apart still.”
Barnier, meanwhile, gave a downbeat briefing to European ministers ahead of Thursday’s EU leaders summit, then tweeted: “We will never sacrifice our future for the present. Access to our market comes with conditions.”
A senior EU source said Brussels would give no more ground and that if Johnson wanted a deal it was up to him to compromise.
“The sticking point in the negotiations is the equivalence clause requested by the EU to avoid distortions of competition if the UK refuses to align itself over time with EU tax, social and environmental standards,” he said.
But a UK government source warned: “We must be realistic that an agreement may not be possible, as we will not compromise on reclaiming UK sovereignty.”
The source added, however: “If we can make progress at a political level it may allow Lord Frost and his team to resume negotiations over the coming days.”
On Thursday, EU leaders including Merkel and French President Emmanuel Macron will be in Brussels for a two-day summit dominated by an EU budget dispute, but Johnson is not expected to meet them.
In recent weeks several member states, publicly led by France but representing several of Britain’s closest neighbours, have expressed concerned that Germany and Von der Leyen’s European Commission have been too ready to compromise with London.
‘Trust and confidence’
Even as London and Brussels try to carve out a new trading relationship, the separate and politically vexed issue of Northern Ireland has loomed in the background.
Northern Ireland will have the UK’s only land border with the bloc from next year, and that border is meant to stay open as part of the 1998 peace deal that ended three decades of violence over British rule.
Johnson’s government had infuriated Dublin and Brussels by introducing a UK internal market bill that would override the EU Withdrawal Agreement, which bound London to respect Northern Ireland’s unique status.
But some measure of trust was restored on Tuesday, when Gove and European Commission vice-president Maros Sefcovic said an agreement had been made “in principle” on border arrangements.
The breakthrough covers goods passing from the British mainland to the province, and onwards to the EU’s single market via Ireland.
As a result, London will cut three controversial clauses in the bill going through the UK parliament that would have denied Brussels a say in future trading arrangements between the province and Ireland.
That could smooth the path for Johnson’s trip after Germany’s Europe minister Michael Roth pointedly demanded London restore “trust and confidence”.