Britain and the European Union urged each other on Friday to give ground in talks over a post-Brexit trade deal or risk failure in tetchy exchanges after the latest bout of bargaining ended with scant progress.
The United Kingdom left the European Union on Jan 31 but the main terms of its membership remain in place for a transition period until the end of this year, giving it time to negotiate a new free trade deal with the bloc.
Failure to reach a deal would convulse global trade just as the world aims to exit the COVID-19 lockdown. But so far the talks have not gone well.
We made very little progress towards agreement on the most significant outstanding issues between us, UK chief negotiator David Frost said after a week of talks.
The main sticking point has been so-called level playing field rules to harmonize regulation, which the EU says are needed to ensure Britain does not undercut its standards, but which Britain rejects as binding it to European laws.
Frost said the major obstacle to a deal was the EU's insistence on including a set of novel and unbalanced proposals on the level playing field.
As soon as the EU recognizes that we will not conclude an agreement on that basis, we will be able to make progress, Frost said. We very much need a change in EU approach for the next round beginning on Jun 1.
EU chief negotiator Michel Barnier said Britain had refused to engage in full conversation about a level playing field and fisheries in a very disappointing third round of talks.
There will be no agreement with the UK without a balanced agreement on fisheries and a proper, balanced agreement on level playing field, Barnier said.
He said he was not optimistic on the chances for a deal this year. We will not bargain away our values for the benefit of the British economy, he said.
London was failing to comprehend the consequences of its own Brexit choices when it came to its ability to access the EU's cherished single market, he said.
He said London had to budge or there would be a stalemate.
Sterling weakened on Friday as Brussels and London dug their heels in ahead of a key deadline at the end of June. Both sides are then due to assess progress so far and agree on whether to extend the talks, which London has refused to do.