The U.K. and the European Union are running out of time to agree terms on a post-Brexit trading arrangement, EU Chief Negotiator Michel Barnier has warned.
Both sides have offered conflicting messages in recent days over the likelihood of a trade deal being agreed before Britain departs the EU’s orbit in two weeks’ time.
Addressing the European Parliament in Brussels on Friday, Barnier said negotiations had reached “the moment of truth.”
“We have little time remaining, just a few hours, to work through these negotiations in a useful fashion if we want the agreement to enter into force on the 1st January,” Barner said.
“There is a chance of getting an agreement but the path to such an agreement is very narrow.”
A deal would likely ensure tariff-free goods trade between the U.K. and the EU after Dec. 31, but key disputes over issues such as fisheries have continued to plague discussions in recent weeks.
British Prime Minister Boris Johnson told reporters on Friday that the U.K. wanted to keep talking so long as there remained a chance of a deal, but that trade discussions were “looking difficult,” according to Reuters.
Both Johnson and European Commission President Ursula von der Leyen adopted more downbeat tones following a phone call on Thursday night, with Johnson suggesting a deal was unlikely unless the bloc was willing to make concessions on fisheries. Meanwhile, von der Leyen acknowledged that an accord would be “very challenging” at this stage.
This came just a day after von der Leyen announced that a “narrow path” had emerged for the two sides to agree a deal before the deadline.
The pound sterling, which had been rallying in recent days on mounting optimism that a damaging “no deal” scenario could be avoided, dropped 0.3% against the dollar during morning trade in London on Friday, changing hands at just above $1.3540.