Hopes for Brexit trade deal hang on leaders' calls

EU chief Ursula von der Leyen and Britain's Prime Minister Boris Johnson held the fate of a post-Brexit trade deal in their hands Wednesday as talks hung in the balance.

The focus of the negotiations has shifted to cross-Channel calls between the leaders after officials failed to close the gap on how to share access to UK fishing waters.

Asked whether a deal was possible on Wednesday or Thursday, a European source close to the talks said: "Yes, but as ever nothing is guaranteed."

If there is no breakthrough in the next two days, teams are expected to take a Christmas break, leaving only a narrow window to reach any deal before New Year.

And, with or without a trade deal, Britain will leave the EU single market at midnight on December 31, ending a half-century of deepening economic partnership.

The remaining differences between the two camps are narrow but deep, in particular over fishing, with EU crews facing a dramatic cut in their catch from British waters.

London wants to reduce EU fishing fleets' share of the estimated 650-million-euro annual haul by more than a third, with changes phased in over three years.

The EU, in particular countries with northern fishing fleets like France, Denmark and the Netherlands -- are insisting on 25 percent over at least six years.

And there are thorny details to be hammered out. There are quotas for more than a hundred different species of fish, and EU members want to share the cuts equally.

EU negotiator Michel Barnier briefed ambassadors and then senior MEPs on Tuesday that he had made his last offer on fish and that it was now up to political leaders to decide.

"Progress has been made. Most issues are preliminarily closed or close to being agreed," a senior diplomat said, recounting Barnier's briefing to EU envoys.

"However, differences on fisheries remain difficult to bridge. Unfortunately, the UK is not moving enough yet to clinch a fair deal on fisheries."

Brussels will continue to negotiate until the end of the year -- or even "beyond", as Barnier suggested -- but time is running out for any deal to be provisionally applied.

EU members agreed to keep talking, but one diplomat warned: "Barnier was unable to tell member states whether there would be a deal tomorrow, before Christmas, the New Year or summer 2021.

"Also a narrow path might in the end prove a dead end," he said

A colleague from another member state suggested that if there was no breakthrough on Wednesday talks could resume next week.

If Barnier and his UK counterpart David Frost fail, the UK will leave without a follow-on trade deal.

Tariffs would be reimposed on cross-Channel trade in food and goods, exacerbating the economic shock of a return to a customs border after 47 years of integration.

Britain and France experienced a foretaste of what the chaos might look like this week, when France abruptly closed its borders to British trucks, trains and planes.

Paris was responding to concerns about a new coronavirus variant spreading in Britain, but the huge queues of trucks and threats of supply shortages were taken as an ominous sign.

Both London and Brussels insist they are ready for a return to tariffs and a customs border -- but business groups are sounding the alarm about the possible disruption to come.