BRUSSELS: Post-Brexit trade talks hung in the balance on Monday (Dec 7) as Britain and the European Union made a last-ditch attempt to bridge significant differences and reach a deal that would avoid a disorderly exit in just 24 days.
With growing fears of no-deal chaos after the United Kingdom finally leaves the EU's orbit on Dec 31, talks will resume in Brussels before British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen review the situation on Monday evening.
Irish Prime Minister Micheal Martin said on Sunday the chances of a deal were 50-50. Investment bank JPMorgan said odds of a no-trade deal exit had risen to one third from 20 per cent.
EU chief negotiator Michel Barnier was "rather downbeat as to the prospects of agreement" when he spoke to national envoys in Brussels on Monday morning, according to one diplomat, adding that Johnson would have to make the ultimate call on a deal.
"The ball is in BoJo's (Johnson's) court," said the diplomat, who was taking part in the briefing. "Differences persist on all three issues."
Britain formally left the EU on Jan 31 but has been in a transition period since then under which rules on trade, travel and business remain unchanged.
For weeks, the two sides have been haggling - as yet without a result - over fishing rights in British waters, ensuring fair competition for companies and ways to solve future disputes.
In Brussels, an EU diplomat told Reuters that Britain had failed to make the "necessary choices" on fishing and fair competition to make a deal possible on trade - worth nearly U$1 trillion each year.
In London, a British lawmaker in Johnson's ruling Conservative Party said France would have to make concessions on fishing and the EU would have to drop their demands on the level playing field.
READ: EU, UK face 'narrow path' to Brexit breakthrough in final push
Failure to secure a deal would clog borders, upset financial markets and disrupt delicate supply chains across Europe and beyond as the world tries to cope with the vast economic cost of the COVID-19 pandemic.
Sterling fell 0.7 per cent against the dollar to US$1.3344, down from the 2-and-a-half year highs of US$1.3540 hit on Friday. Measures of expected swings in the British pound jumped to eight-month highs.
With just days left for a deal to be agreed, EU diplomats said it a decisive moment for both the United Kingdom and the bloc which built the ruined nations of Europe into a global power after the devastation of World War Two.
"Decisive hours for the future of EU-UK relations," said Sebastian Fischer, an EU spokesman for Germany, the current holder of the EU presidency.
While some diplomats said the last-minute drama showed a deal was close, Ireland - the EU member state whose economy is likely to be worst hit by a disorderly Brexit - said it would not be shocked if talks fell apart.
"I still think it is more likely than not that we will find a way of getting a deal done but I won't be shocked if it falls apart," Irish Foreign Minister Simon Coveney was quoted as saying by the Irish Times.
"If we don't get a deal in the next few days, then obviously there are serious problems around ratification and timelines."
In a move that could further undermine the talks, the British government will press ahead with draft laws this week that would breach London's earlier divorce treaty with the bloc.
Junior Foreign Office Minister James Cleverly said on Monday the clauses that breach the treaty would be reinserted.