The United Kingdom will sever ties with the EU bloc from midnight on Dec. 31 when the transition agreement ends, with or without a deal.
With businesses demanding clarity and hoping for a deal, neither side wants to blink, calling on each other to shift position in all-but-stalled negotiations.
Prime Minister Boris Johnson said once again that he was “confident [the UK] will prosper” if no deal is struck, as Health Minister Matt Hancock said the government was sticking to its “red lines.”
Irish Foreign Minister Simon Coveney said on Monday, “If there is not a major breakthrough over the next week to 10 days then I think we really are in trouble and the focus will shift to preparing for a no-trade deal and all the disruption that that brings.”
Coveney told Ireland’s Newstalk radio station: “I think the British government understands only too well that’s required for a deal this week, the real question is whether the political appetite is there to do it. I think we will [get a deal], that’s been my prediction for a while but I won’t be shocked if it all falls apart.”
Major sticking points include the UK negotiator’s concerns with ensuring a “level playing field” on competition rules and state aid for businesses, and the symbolically charged issue of fishing rights.
UK negotiators are demanding the deal must respect the sovereignty that many Brexit voters felt was undermined by EU membership. However, the EU is unwilling to set up a deal too similar to far-flung nations such as Canada, saying that the proximity of the UK brings different dynamics into play.
Britain’s chief negotiator, David Frost, said on Sunday there had been some progress over recent days and that the two sides had common draft treaty texts, though significant elements were yet to be agreed.
“We may not succeed,” Frost said. “We are working to get a deal, but the only one that’s possible is one that is compatible with our sovereignty and takes back control of our laws, our trade, and our water.”
Chief EU negotiator Michael Barnier said the bloc members “remain determined, patient, respectful.” Writing on Twitter, he said, “We want our future cooperation to be open but fair in all areas.”
Meanwhile, a survey of small and medium manufacturers published today said that nearly half did not know how transitioning out of the EU would impact their business.
Only three percent of the 409 companies surveyed for the South West Manufacturing Advisory Service (SWMAS) and the Manufacturing Growth Programme believed Brexit would have a positive impact on their recovery.
“It’s like a perfect storm for management teams trying to plan, but have no idea what they are planning for and many are also coping with lower levels of resource as a result of the pandemic,” said Nick Golding, managing director of SWMAS.
Reuters contributed to this report