BRUSSELS — With a chaotic and costly no-deal Brexit only three weeks away, gloom settled on both sides of the English Channel as European Union and United Kingdom trade negotiators sought to find a breakthrough in technical talks where their leaders failed three times in political discussions over the past week.
Facing a Sunday deadline set after inconclusive talks between EU Commission President Ursula von der Leyen and British Prime Minister Boris Johnson Wednesday night, both sides realized their drawn-out four-year divorce might well end on bad terms.
“I am a bit more gloomy today, as far as I can hear,” said Swedish Prime Minister Stefan Lofven at a EU summit where von der Leyen briefed the 27 leaders on her unsuccessful dinner with Johnson.
“She was not really confident that all difficulties could be resolved,” said David Sassoli, the president of the EU parliament which will have to approve any deal brokered. A cliff-edge departure that would threaten hundreds of thousands of jobs and tens of billions in commerce was coming ever closer.
To prepare for a sudden exit on Jan. 1, the EU today proposed four contingency measures to make sure that at least air and road traffic would continue between both sides as smoothly as possible for the next six months.
It also proposes that fishermen will still have access to each other’s waters for up to a year, to limit the commercial damage of a no-deal split. The plans depend on the U.K. offering similar initiatives. The move was indicative of how the EU saw a bad breakup as ever more realistic.
Britain has not said whether it will agree to the contingency measures. Johnson’s spokesman, Jamie Davies, said “we will obviously look very closely at the details.”
For months now, trade talks have faltered on Britain’s insistence that as a sovereign nation it must not be bound indefinitely to EU rules and regulations even if it wants to export freely to the bloc. That same steadfastness has marked the EU in preserving its cherished single market and seeking guarantees against a low-regulation neighbor that would be able to undercut its businesses.
After Johnson’s midnight return to London, reactions were equally dim there.
U.K. Foreign Secretary Dominic Raab said the Sunday deadline was a “moment of finality” — though he added “you can never say never entirely.”
In four years of talks on the U.K.’s departure terms and a future trade relationship, such self-imposed deadlines have been broken time and again in the four years since Britain voted to leave the EU.
Jan. 1 though is different, since the U.K, has made the 11-month transition time since its Jan. 31 official departure legally binding.
“There are big ideological, substantive and policy gaps that need to be bridged,” said Mujtaba Rahman, Europe managing director for the Eurasia Group. “They’re so far apart and the time is so limited now.”
A no-deal split would bring tariffs and other barriers that would hurt both sides, although most economists think the British economy would take a greater hit because the U.K. does almost half of its trade with the bloc.
Months of trade talks have failed to bridge the gaps on three issues — fishing rights, fair-competition rules and the governance of future disputes.
While both sides want a deal, they have fundamentally different views of what it entails. The EU fears Britain will slash social and environmental standards and pump state money into U.K. industries, becoming a low-regulation economic rival on the bloc’s doorstep — hence the demand for strict “level playing field” guarantees in exchange for access to its markets.
“I still hope that we will find a solution but it’s half-half,” said Luxembourg Prime Minister Xavier Bettel, before adding
“I prefer no deal than a bad deal.”