BRUSSELS — The European Parliament issued on Thursday a three-day ultimatum to Brexit negotiators to strike a trade deal if they are to be in a position to ratify an agreement by the end of the year when the U.K. leaves the European Union’s tariff-free single market and customs union.
With negotiators still in Brussels trying to find a way through a series of issues that have bedeviled talks for months, European lawmakers said they will need to have the terms of any deal in front of them by the end of Sunday if they are to organize a special gathering before the end of the year.
It’s the latest seeming deadline over the past few months, but each time it is reached, the negotiators find a way to carry on the discussions. But time is in short supply.
Though the U.K. left the EU on Jan. 31, it remains within the bloc’s tariff-free single market and customs union until Dec. 31. A failure to reach a deal would likely lead to chaos on the borders at the start of 2021 as tariffs and other impediments to trade are enacted by both sides.
A trade deal would ensure there are no tariffs and quotas on trade in goods between thnot ie two sides, but there would still be technical costs, partly associated with customs checks and non-tariff barriers on services.
Hopes have risen in recent days over the prospects of a deal. Following a discussion over the weekend, British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen backed a further continuation in the talks despite the looming end-date.
“Good progress, but last stumbling blocks remain,” the EU’s chief negotiator, Michel Barnier, tweeted Thursday after briefing leaders in the European Parliament about the state of the talks.
The conference of presidents of the Parliament’s political groups said it is ready to organize a plenary session by the end of the month, but on condition that “an agreement is reached by midnight” on Dec. 20.
If a deal comes later, it could only be ratified in 2021, as the parliament wouldn’t have enough time to debate the agreement before that.
“We give until Sunday to Boris Johnson to make a decision,” said Dacian Ciolos, president of the Renew Europe group in the European Parliament. “The uncertainty hanging over citizens and businesses as a result of U.K. choices becomes intolerable.”
Britain’s Parliament must also approve any Brexit deal and the Christmas break adds to the timing complications. Lawmakers are due to be on vacation from Friday until Jan. 5, but the government has said they can be called back on 48 hours’ notice to approve an agreement if one is struck.
Michael Gove, a senior minister in the British government, said that despite some recent progress, significant issues remained over business regulations, how to resolve disputes and on fisheries, and that as a result the talks probably won’t lead to a deal.
“I think, regrettably, the chances are more likely that we won’t secure an agreement,” he said. “So at the moment less than 50%.”
Though both sides would suffer economically from a failure to secure a trade deal, most economists think the British economy would take a greater hit, at least in the near-term, as it is relatively more reliant on trade with the EU than vice versa.
Both sides have said they would try to mitigate the impact of no-deal, but most experts think that whatever short-term measures are put in place, the disruptions to trade will be immense.