EU chief Brexit negotiator Michel Barnier signalled “some progress” on Monday in talks on a post-Brexit trade deal, EU diplomats said, but differences remain on key sticking points.

“There might now be a narrow path to an agreement visible – if negotiators can clear the remaining hurdles in the next few days,” an EU diplomat said after a briefing from Barnier.

“There has been some progress in the negotiations over the last few days, but – sometimes substantial – gaps still need to be bridged in important areas like fisheries, governance and level playing field,” the diplomat said.

EU chief Ursula von der Leyen and Prime Minister Boris Johnson had said last week they would decide whether an agreement was possible by the end of Sunday, but agreed in a crisis call to “go the extra mile”.

“Our negotiating teams have been working day and night over recent days,” von der Leyen said in a video message, reading out a joint statement agreed with Johnson.

“We have accordingly mandated our negotiators to continue the talks and to see whether an agreement can even at this late stage be reached,” the leaders said.

They did not offer a new deadline but Conservative Party lawmaker Mark Harper suggested the extended talks could go right to the wire, with less than three weeks until Britain leaves the single market at the end of the month.

“Many of us are fully anticipating it’s entirely possible we might be returning to Parliament between Christmas and new year to scrutinise this and vote it through if a deal is done,” he told the Press Association.

EU negotiator Michel Barnier and Britain’s David Frost held talks late on Saturday and early on Sunday. They have been alternating between the capitals but a European official said that, for the moment, they would remain in Brussels.

Barnier will brief European ambassadors on Monday morning about the current state of negotiations, EU Council spokesman Sebastian Fischer said.

Johnson insisted that an agreement was far from sure.

“I’m afraid we’re still very far apart on some key things, but where there’s life there’s hope,” he said at Downing Street after briefing his cabinet about the call.

“The UK certainly won’t be walking away from the talks. I still think there’s a deal to be done if our partners want to do it,” he added.

Reports suggested the two sides were exploring a potential deal on how to respond if their regulations diverge over time and threaten fair competition.

But Britain cannot compromise on the “fundamental nature” of Brexit, controlling UK laws and fisheries, the prime minister said.

Without a deal, cross-Channel trade will revert to World Trade Organization rules, with tariffs driving up prices and generating paperwork for importers, and the failed negotiation could poison relations between London and the continent for years to come.

“Either way, whatever happens, the UK will do very, very well,” Johnson insisted.

‘No stone unturned’

Ireland stands to lose out more than any other EU country if trade with its larger neighbour is disrupted, and cautiously welcomed the reprieve.

“Time to hold our nerve and allow the negotiators to inch progress forward, even at this late stage. Joint statement on Brexit negotiations is a good signal. A deal clearly very difficult, but possible,” Foreign Minister Simon Coveney tweeted.

The hardline pro-Brexit faction in Johnson’s own British Conservatives was unconvinced, however, and MPs fired their own tweets warning against any concessions.

Much of the text of a possible trade deal is said to be ready, but Britain and Brussels are wrangling over a mechanism to allow for retaliation if UK and EU laws diverge in a way that puts continental firms at a competitive disadvantage.

“The defence of the single market is a red line for the European Union,” an EU source said. “What we have proposed to the United Kingdom respects British sovereignty.”

In London, the government insists that Britain is ready to leave the union and handle its own affairs after 47 years of close economic integration.

Downing Street says it has mapped out “every single foreseeable scenario” for problems after December 31, and “no one needs to worry about our food, medicine or vital supply chains”.

The government says it is ready to offer hefty new support for sectors in the firing line such as farming and autos, but British business groups are aghast at the lack of clarity on future trading rules.

Scotland’s nationalist government meanwhile demanded an end to “the crippling uncertainty” of a possible no-deal Brexit coming on top of the coronavirus pandemic.

And the European Parliament is deeply unhappy as time runs out for a thorough review of any pact before the year-end deadline.

“Irresponsible and bitter,” senior German MEP Bernd Lange tweeted about the drawn-out saga, warning that serious ratification is becoming “increasingly impossible”.

(FRANCE 24 with AFP)