LONDON — As Prime Minister Boris Johnson of Britain headed to Brussels on Wednesday for critical talks on post-Brexit trade with the European Union, economic logic suggested he badly needs a deal. But having campaigned for Brexit on the basis of reclaiming national sovereignty, Mr. Johnson faces a tough task in reaching any agreement acceptable to both the bloc and Brexit supporters back home.
With an endgame fast approaching, Mr. Johnson was scheduled to meet with Ursula von der Leyen, the president of the European Commission, the bloc’s executive body, over dinner for talks that could determine the shape of Britain’s relations with continental Europe for decades to come.
On Thursday, European Union leaders are set to gather in Brussels with other important issues on their agenda, like the next seven-year budget, the coronavirus recovery fund, the rule of law and possible sanctions on Turkey.
If the Brexit trade discussions go badly Wednesday night, the talk may shift to how to cope with the failure to strike a deal, and how to limit disruption in January when an abrupt switch in the terms of commerce could leave ports blocked and trucks stranded. But the Europeans are agreed that they will not be the ones to pull the plug on negotiations.
The German chancellor, Angela Merkel, remained upbeat on Wednesday about the trade negotiations, saying “there is still the chance of an agreement.” But she stressed that the European Union would not accept any deal “if there are conditions from the British side that we can’t accept” or that threatens the single market.
A breakthrough over dinner, should it come, would give momentum for a final push to strike the elusive trade agreement that many analysts have expected to emerge, theatrically, not long before the Dec. 31 deadline.
Inevitably, given the acute sensitivities, the signals have been mixed, with both sides stressing the distance that must be traveled to strike an accord.
The Irish foreign minister, Simon Coveney, has expressed his belief that there will be some “thin” deal, a bare minimum agreement, but that the last hurdles are always the most difficult. “I think the negotiating teams and senior politicians will find a way of getting a deal,” he said, “but at the moment we’re in a difficult place as we try to close it out.”
But even Mr. Coveney, who is a good barometer of European sentiment, is becoming more gloomy. He said Monday night, after a meeting of bloc foreign ministers, that the mood was shifting toward preparations for going forward without a deal. There is “a great deal of frustration on the E.U. side, not just within the E.U. negotiating team” but “also across member states,” Mr. Coveney said.
One outstanding issue was resolved on Tuesday when London dropped a threat to break its withdrawal treaty — and to breach international law — over how it would implement rules on the flow of goods between Britain and Northern Ireland.
Yet, the three main issues that have prevented them from striking a trade deal remain unresolved: fishing rights, the rules on state subsidies and “level playing field” provisions to ensure fair competition between British and European companies, and the mechanisms to enforce them.
While access to fishing stocks is an extremely sensitive political issue for Britain, France and other coastal European nations, the other two issues are probably more difficult to resolve, because they touch on the hypersensitive principles of sovereignty.
The biggest gap is over the terms of fair trade, because officials in Brussels fear that, as a large economy on Europe’s doorstep, Britain could adopt lower labor or environmental standards, flood the European market and undercut continental companies.
But at this point, Mr. Johnson faces a dilemma. Negotiators in Brussels want the right to impose tariffs on imports should Britain diverge from Europe’s standards. Given that Britain says it does not, in general, intend to adopt lower standards, it might never have to confront such a situation. But if Britain fails to strike a trade deal it would definitely face tariffs.
Rather than a dry and technical trade issue, Mr. Johnson sees this as a European attempt to tie Britain to the bloc’s future rule book, trampling the national sovereignty that was at the heart of his vision for Brexit.
Mr. Johnson told lawmakers on Wednesday that a good deal was still possible. But he added that if Britain failed to follow future European rules, Brussels wanted the “automatic right to punish us and to retaliate,” adding that no British prime minister should accept such terms.
Hard-liners within his own party have amplified that argument, appealing to him not to compromise in the discussions with Ms. von der Leyen.
“The reality is that this is all about sovereignty,” Iain Duncan Smith, a former leader of the Conservative Party and a Brexit enthusiast, wrote in The Daily Telegraph. “From the beginning, it has been clear, whilst the U.K. wants a trade deal, E.U. wants to control us. Either the U.K. is sovereign or it is not.”
Yet the price of exercising complete sovereignty could be very high. Failure to strike a trade deal could well be exploited by pro-independence campaigners in Scotland, where a majority of voters opposed Brexit in a 2016 referendum. It would also wipe an additional 2 percent off British economic output while driving up inflation, unemployment and public borrowing, official forecasts said last month.
While European nations would suffer, too, none — with the possible exception of Ireland — would be hit as hard as Britain. Senior French officials, like the Europe minister, Clément Beaune, have said that France is ready to veto an unsatisfactory deal, and Dutch officials have suggested that the European Union’s chief negotiator, Michel Barnier, is coming very close in his negotiations to crossing “the red lines” of his mandate.
Ms. Merkel stressed the need for Britain to adhere closely to the bloc’s rules on labor, the environment and fair competition, as well as for mechanisms to police any agreement.
“We must have a level playing field not just for today, but we must have one for tomorrow or the day after, and to do this we must have agreements on how one can react if the other changes their legal situation,” Ms. Merkel said. “Otherwise there will be unfair competitive conditions that we cannot ask of our companies.”
The Europeans are adamant that the mandate will not change and that Mr. Barnier has their confidence. While European nations may have differing priorities, their leaders say that they will not break the solidarity shown so far, and that their formal role will be simply to endorse any deal Mr. Barnier can reach — or acknowledge that the talks have failed.
How this gets resolved — how far Britain must keep to rules set in Brussels and how to settle any disputes that arise — remains at the heart of the continuing disagreements. But selling any deal that emerges is another matter entirely.
Stephen Castle reported from London, and Steven Erlanger from Brussels.