LONDON (BLOOMBERG) - Negotiators are racing to save a trade deal between the Britain and European Union in light of a major dispute just hours before they were expecting to announce an accord.
Officials will spend the weekend in London trying to find a solution, with the two sides at loggerheads over several disagreements that had earlier appeared near to being settled.
The Britain has blamed France for hardening the EU's demands.
On Friday (Dec 4), the country's European affairs minister, Clement Beaune, reiterated his government will veto any deal if it isn't in its national interest.
Germany called for both sides to compromise.
"We are at a very difficult point in the talks," Boris Johnson's acting deputy official spokesman Shaun Jepson told reporters. "Time is in very short supply."
If a deal isn't reached, businesses and consumers will be left facing the cost and disruption of tariffs and quotas, while relations between the Britain and EU risk being poisoned for a generation.
One EU official, who spoke on condition of anonymity, said a breakthrough isn't imminent and that fundamental differences between the two sides still need to be bridged.
Michel Barnier, the EU's chief negotiator, will remain in London for talks after cancelling plans to update envoys from the bloc on Friday.
Officials haven't yet reached agreement on three key issues: access to British fishing waters, the competitive level playing field for business, and how any overall agreement is enforced.
The pound curbed its gain briefly before rising 0.2 per cent to US$1.3474. The currency has been whipsawed by Brexit headlines this week as the Dec 31 end of the post-Brexit transition period nears.
Optimism had been growing for days that an agreement could be struck this weekend.
But British officials said the EU turned up with a new set of demands on Thursday, sending the talks backward.
They didn't say what the demands were, and EU officials denied it.
French President Emmanuel Macron is determined that his fishing industry won't lose a big part of its access to British waters and wants British businesses to be tied to strict rules on state aid and labor standards so they don't have what he sees as an unfair advantage.
"If there is a deal which is not good," Beaune told Europe 1 radio, "then we would oppose it. We always said so."
German Chancellor Angela Merkel, who has taken a softer line than her French opposite number, meanwhile called for Britain and EU to make concessions.
"For the chancellor, and that hasn't changed in recent weeks, the willingness to compromise is needed on both sides," government spokesman Steffen Seibert said. "There are red lines, that's clear, but there is always room for compromise."
