Crunch U.K.-E.U. talks on post-Brexit ties to resume Sunday

LONDON — The European Union and the United Kingdom decided Saturday to press on with negotiating a post-Brexit trade deal well beyond any imaginable deadline and with all three key issues still unresolved ahead of a year-end cutoff.

European Commission President Ursula von der Leyen and British Prime Minister Boris Johnson acknowledged after a phone call that their negotiators will return to the table Sunday with fundamental differences on rules for fair competition, legal oversight of the deal and even fishing rights for EU trawlers in U.K. waters.

“Significant differences remain,” the two leaders said in a joint statement after their tea-time call to assess the state of play over the future EU-U.K. relationship.

While the U.K. left the EU on Jan. 31, it remains within the bloc’s tariff-free single market and customs union through Dec. 31. Reaching a trade deal by then would ensure there are no tariffs and trade quotas on goods exported or imported by the two sides, although there would still be technical costs, partly associated with customs checks and non-tariff barriers on services.

The talks would surely have collapsed by now, were the interests and economic costs at stake not so massive. But because the EU is an economic power of 450 million and Britain has major diplomatic and security interests beyond its own commercial might, the two sides want to explore every last chance to get a deal before they become acrimonious rivals.

“Whilst recognizing the seriousness of these differences, we agreed that a further effort should be undertaken by our negotiating teams to assess whether they can be resolved,” Johnson and von der Leyen said after speaking by phone for about an hour.

“We are therefore instructing our chief negotiators to reconvene tomorrow in Brussels,” the pair said in their statement, adding that they would reassess the chances of success on Monday night.

The two leaders noted that progress has been achieved in many areas and also the areas of division on the issues of fishing rights, the “level playing field” — the standards the U.K. must meet to export into the bloc — and how future disputes are resolved.

An EU source, who spoke on condition of anonymity because the talks were still ongoing, said the fair competition rules that the U.K. should meet before it can export tariff-free into the 27-nation bloc, were still a major stumbling issue after earlier deadlines set for the summer, pushed to September and then the fall had passed.

“Both sides underlined that no agreement is feasible if these issues are not resolved,” von der Leyen and Johnson said Saturday.