03:38 GMT19 January 2021
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    The United Kingdom formally left the European Union at the beginning of 2020. Until December, Britain remained in a transition phase during which it has been negotiating terms of its future relationship with the bloc.

    The chances of the UK reaching a Brexit deal with the European Union are no greater than 50 percent, Westminster sources are reportedly predicting on Saturday, as Boris Johnson and Ursula von der Leyen prepare to begin direct talks after their respective negotiators failed to agree terms in London.

    The UK Prime Minister, who is at his official country seat of Chequers, and the president of the European Commission are expected to conduct a phone conversation later this afternoon to come to a solution.

    According to The Guardian, negotiations are expected to conclude with arbitration between the two leaders, but it is at present uncertain that there will be an effective compromise.

    EU sources say that the talks remain in deadlock over three key issues: fishing sovereignty, state aid, and future dispute resolution.

    All other aspects of the trade agreement, which is predicted to reach up to 600 pages, have already been set out, The Guardian reports.

    If the two leaders give negotiators orders to continue, a potential agreement could be on the cards giving EU ambassadors in Brussels and the UK government time to examine the terms of the deal as early as Sunday. However, the process could still enter into next week.

    Johnson and Von der Leyen are expected to try to find common ground over the EU's "level playing field” regulations and establish EU fishing boats in UK waters by the end of December.

    The Guardian cited EU sources who reportedly rejected claims from Westminster claiming that the primary hurdle to an agreement is a 10-year transition period to allow for changes to be made to European fishing fleets.

    “The UK wants a short transition, we have asked for a much longer one. There is a middle way, and that is not the cause of any problem,” a source said.

    Continued Deadlock

    The EU is adamant that the UK should not subsidise industries and distort fair market activity or reduce standards in social, environmental, or labour rights.

    EU sources reportedly said the UK has so far not pledged not to reduce common standards after the transition period ends. This is reportedly because of a contentious definition and the particulars of how disputes can be resolved in the future.

    The UK opposes Brussels’ demand eventually to exempt all EU funding from state-aid rules - an issue which was highlighted by British deputy negotiators weeks earlier but has yet to be settled

    EU chief negotiator, Michel Barnier, told reporters on Saturday morning that the trading bloc will "keep calm, as always, and if there is still a way, we will see", as he left King’s Cross railway station to by train for Brussels.

    In a joint statement on Friday, Barnier and the UK’s chief negotiator, David Frost, said that terms had not been agreed on and the trade and security negotiation would be halted.

    “After one week of intense negotiations in London, the two chief negotiators agreed today that the conditions for an agreement are not met, because of significant divergences on the level playing field, governance and fisheries”, Barnier and Frost said in the statement.
    “On this basis, they agreed to pause the talks in order to brief their principals on the state of play of the negotiations. Von der Leyen and Johnson will discuss the state of play tomorrow afternoon".

    ​Some EU member states have criticised Von der Leyen for her alleged willingness to reach a Brexit deal at any cost.

    On Friday, a spokesman for German Chancellor Angela Merkel called on both sides to compromise, while the French government warned that its veto power could be used to scupper the deal if it failed to meet the bloc's criteria.

    “For the chancellor, and that hasn’t changed in recent weeks, the willingness to compromise is needed on both sides. If you want to have a deal then both sides need to move towards each other. Everybody has their principles, there are red lines, that’s clear, but there’s always room for compromise", the spokesman said.

    Britain is set to leave the European Union's legal and regulatory structures fully on 31 December, if a deal is not reached soon, then the UK will leave without a deal at the end of 2020.

    Related:

    UK PM to Speak to EU Chief on Saturday as Post-Brexit Trade Talks Put on Hold
    France Threatens to Scupper Brexit Trade Deal Over Fisheries as Germany Urges 'Compromise'
    Johnson Warned by Tories Against Caving to EU Pressure As Post-Brexit Trade Deal ‘Teeters’ on Brink
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    United Kingdom, European Union, negotiations, Brexit
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