A “narrow path” has opened up for the UK and EU to strike a post-Brexit trade deal, the president of the European Commission has said.
Ursula von der Leyen said the “next few days are going to be decisive”, with negotiators working “day and night” to reach an agreement.
She said negotiations over how a deal would be enforced are “largely being resolved”.
But she added talks over fishing rights are “still very difficult”.
Officials from both sides are continuing talks in Brussels, as they race to strike a deal before the UK stops following EU trading rules on 31 December.
Despite weeks of intensive talks, they have remained stuck over fishing rights and how far the UK should be able to depart from EU rules.
Updating the European Parliament on an EU leaders’ summit last week, Mrs von der Leyen said: “As things stand, I cannot tell you whether there will be a deal or not.
“But there is a path to an agreement now – the path may be very narrow, but it is there.”
She said that negotiators had agreed a “strong mechanism” to ensure neither side lowers their environmental or social standards, which was a “big step forwards”.
But she added differences remained over how to “future proof” rules in this area, although disagreements over how to enforce a deal “by now are largely being resolved”.
A UK official said on Wednesday: “We’ve made some progress, but we are still very far apart in key areas.”
- Brexit happened but rules didn’t change at once: The UK left the European Union on 31 January 2020, but leaders needed time to negotiate a deal for life afterwards – they got 11 months.
- Talks are happening: The UK and the EU have until 31 December 2020 to agree a trade deal as well as other things, such as fishing rights.
- If there is no deal: Border checks and taxes will be introduced for goods travelling between the UK and the EU. But deal or no deal, we will still see changes.
Mrs von der Leyen also reported progress in another area which has proved contentious – agreed rules on how and when each side can give government subsidies to private firms.
She confirmed the two sides were now trying to agree “common principles” for when subsidies could be offered.
At an earlier stage in talks, the EU had insisted the UK should follow its current and future “state aid” rules in this area – a demand rejected by the UK.
The German politician added that there had been progress on “guarantees of domestic enforcement” of the rules, as well as allowing both sides to “autonomously” take action where disagreements arise.
Fishing troubles continue
However, she was more downbeat on fishing, where the two sides are haggling over access to each other’s waters for their fishermen after 1 January.
“In all honesty, it sometimes feels that we will not be able to resolve this question,” she said, but added that continuing the talks was the “only responsible” course of action.
On Tuesday, Prime Minister Boris Johnson told his cabinet the UK still wanted a deal, but would not agree to one “at any cost”.
According to his spokesman, he also reiterated view to senior ministers that the talks are still “most likely” to end without an agreement.