Brussels is “intensifying” its preparations for a no-deal Brexit as the two sides still harbour “significant differences”, according to EU negotiator Michel Barnier.
The UK and EU wrapped up the eighth round of trade negotiations today, with the two sides still deadlocked over several key issues.
It comes on the same day that the EU has threatened legal action against the UK, after Boris Johnson yesterday launched an attempt to alter the terms of the Brexit withdrawal agreement as they relate to Northern Ireland.
It is understood that the EU will break off trade talks if Johnson does not scrap his plans by the end of the month.
Barnier said in a statement on the latest round of trade talks that “mutual trust and confidence are and will be necessary” if a deal is to be struck by 15 October, which Boris Johnson has said is a hard deadline.
“At the same time, the EU is intensifying its preparedness work to be ready for all scenarios on 1 January 2021,” he said.
Barnier said that the biggest difference between the two sides was still a failure to agree on business competition regulations known as the level playing field.
The EU is asking the UK to match regulations on a number of areas – like labour and environmental laws – in return for zero-tariff trade.
“The UK is refusing to include indispensable guarantees of fair competition in our future agreement, while requesting free access to our market,” Barnier said.
“Modern trade agreements are about ensuring sustainable and fair partnerships with high standards in areas like the environment, climate, employment, health and safety, and taxation.
“These principles are now at the heart of EU trade policy: with the UK, and with other partners around the world.”
Chief UK negotiator Lord David Frost has said Britain will not be a rule-taker and accept level playing field regulations as set by the EU.
However, his comments after the latest round of negotiations struck a less incendiary tone than Barnier’s, saying the two sides had had “useful exchanges”.
“We have consistently made proposals which provide for open and fair competition, on the basis of high standards, in a way which is appropriate to a modern free trade agreement between sovereign and autonomous equals,” he said.
“We remain committed to working hard to reach agreement by the middle of October, as the Prime Minister set out earlier this week.”
Other areas of difference are EU access to UK fishing waters and the role of the European Court of Justice in governing the deal.