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Talk of a chaotic British split from the European Union grew on Tuesday with just three weeks left to break a deadlock in trade deal negotiations, with U.K. Prime Minister Boris Johnson warning that the two sides may have to accept “no deal.”

The EU’s chief negotiator, Michel Barnier, told a meeting of the bloc’s ministers that he believed a no-deal scenario at the end of the year was now more likely than an agreement on trade ties, an EU official and two diplomats told Reuters.

Deepening the gloom, Irish Prime Minister Micheal Martin said that unless there was a breakthrough “in the next day or two,” EU leaders meeting in Brussels on Thursday and Friday would have to discuss contingency plans for the economic disruption that a lack of a deal would bring.

“Unfortunately we are facing the prospect of a no-deal Brexit if something doesn’t break that in the next day or two,” Martin told Parliament in Dublin.

Johnson will meet Ursula von der Leyen, president of the EU’s executive European Commission, for dinner in Brussels on Wednesday to try and close gaps their negotiators have struggled with for months.

But the language on both sides has hardened, and both have called on the other to compromise ahead of a meeting that is widely seen as a last throw of the dice.

The U.K. formally left the EU in January, but has since been in a transition period during which it remains in the EU single market and customs union, meaning that rules on trade, travel and business have stayed the same.

That all ends on Dec. 31, and if by then there is no agreement to protect around $1 trillion in annual trade from tariffs and quotas, businesses on both sides would be hit hard.

Asked whether he would try until the last possible moment to do a deal on trade, Johnson told reporters, “Yeah of course.”

“We’re always hopeful but you know there may come a moment when we have to acknowledge that it’s time to draw stumps and that’s just the way it is,” said Johnson, using a cricketing term for the end of play.

“We will prosper mightily under any version and if we have to go for an Australian solution then that’s fine too.”

Australia has no free trade deal with the EU, and so the bulk of its trade is on basic World Trade Organization terms.

In a sign of some movement in parallel talks on implementing an earlier treaty on the U.K.’s withdrawal — not the terms of future trade — the two sides said they had reached agreement on arrangements for the Ireland-Northern Ireland border.

As a result, Britain said it would remove clauses in legislation that were in breach of the exit treaty.

EU chief Brexit negotiator Michel Barnier leaves EU headquarters in Brussels on Tuesday. | AP
EU chief Brexit negotiator Michel Barnier leaves EU headquarters in Brussels on Tuesday. | AP

The Irish government welcomed the deal, which avoids the need for a hard border on the only land frontier between the EU and the United Kingdom. Northern Ireland, a British province, in effect stays in the EU customs union and single market for goods when the rest of the United Kingdom leaves fully.

“Hopefully this is a signal that the British government is in deal-making mood,” Irish Foreign Minister Simon Coveney told RTE news.

The sticking points in trade talks have been over fishing rights in British waters, ensuring fair competition for companies on either side, and ways to solve future disputes.

With little sign that positions are narrowing — officials said talks had, if anything, gone backwards Monday — the European Commission said discussions could continue after the end of this year. The U.K. has repeatedly ruled this out.

Pedestrians cross Westminster Bridge as fog envelopes the Palace of Westminster in London on Tuesday. | AFP-JIJI
Pedestrians cross Westminster Bridge as fog envelopes the Palace of Westminster in London on Tuesday. | AFP-JIJI

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