The European Union (EU) and the UK have agreed to continue Brexit trade talks in hopes of reaching an agreement before the transition period ends on December 31.
Sunday had been slated as a cut-off point to reach an agreement before the end of the UK’s Brexit transition period, Xinhua news agency reported.
But in a surprise move, UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen agreed that negotiations between both sides should continue beyond the deadline.
After a “constructive and useful phone call” with Johnson, von der Leyen said in a statement late Sunday that despite the fact that deadlines have been missed over and over, “we both think it is responsible at this point to go the extra mile”.
Further negotiations will take place in Brussels, von der Leyen said, adding that it remains to be seen if an agreement can be reached even “at this late stage”.
The development raised hopes on both sides of the English Channel, that at the 11th hour, a future trading deal between both sides started to appear on the horizon.
Despite the last-minute extension, Johnson said both sides remain “very far apart on key issues”.
“We are always happy to talk and make progress where we can. I do think there is a deal to be done, if our partners, want to do it,” he told the media.
The Sunday deadline had been set on the basis that time was needed for the British and the European parliaments to ratify the deal.
Under the EU rules, a veto from just one member state would be enough to reject any deal.
The continuation agreement was welcomed by politicians and business leaders, though companies were still being urged to ready themselves for a no-deal exit from the regional bloc.
In its first response to Sunday’s development, a spokesperson for the UK’s main opposition Labour Party said: “The Conservatives promised the British people that they had an oven-ready deal and that they would get Brexit done.
“The government needs to deliver on that promise, get us the deal and allow us to move on as a country.”
Simon Coveney, Ireland’s Foreign Minister, said on Twitter: “Time to hold our nerve and allow the negotiators to inch progress forward even at this late stage.
“The joint statement on Brexit negotiations is a good signal. A deal clearly very difficult but possible.”
Tony Danker, director-general of the Confederation of British Industry (CBI), said: “The news that talks will continue gives hope. A deal is both essential and possible. It is the only way to build upon the extensive support for the economy given by all governments during the pandemic. Without it, that progress is undermined.”
He said the UK government must move with even more determination to avoid the looming cliff edge of January 1, 2021.
A trade deal needs to be agreed upon by London and Brussels before the transition period expires.
Failure to reach the agreement means bilateral trade will fall back on World Trade Organization rules in 2021.
The British and EU leaders have said significant differences still remain between the two sides on three critical issues: level playing field, governance and fisheries.
Meanwhile, Adam Marshall, director general of British Chambers of Commerce, said: “This is a very frustrating time for business as they anxiously wait for decisions about the terms of trade with the EU come January 1.
“If a few more hours or days makes the difference, keep going, and get an agreement that delivers clarity and certainty to businesses and trade on both sides. Businesses will need time and support to adjust in a New Year like no other — whatever the eventual outcome.”