UK and EU blame each other for trade talks stalemate

The EU's Brexit negotiator Michel Barnier said that this third round of talks was "disappointing", and added he was "not optimistic" on reaching a final agreement.

"I regret however that we made very little progress towards agreement on the most significant outstanding issues between us," David Frost, UK chief negotiator, said in a statement.

The UK left the bloc on 31 January and the two sides are engaged in talks on the future relationship, while the terms of the UK's membership remain in place during the transition period until the end of the year.

The UK could ask for an extension before the end of June - but London has repeatedly ruled that out.

One of the main sticking points is the so-called level playing field, intended to harmonise regulations under the zero-tariff, zero-quota trade agreement.

The EU is arguing that it is needed so that Britain does not undercut its businesses, while Britain rejects being bound to EU law on workers' rights, environmental protections and other such regulations.

Frost said the major obstacle to a deal was the EU's insistence on including a set of "novel and unbalanced" proposals on the level playing field.

Barnier argued, however, that the EU "would not bargain away its values" for the benefit of the British economy.

"Why should we help British businesses to sell services in Europe, when we would have no guarantee that our businesses would get fair play treatment in the UK?," Barnier said at the press conference on Friday.

"Today there seems to be a real lack of understanding regarding the objective consequences of the British choice," he added, saying the British would have to become more realistic.

Frost on the other hand accused the EU of having an "ideological approach" hampering the prospects of a deal.

Another major sticking point is an agreement on access to fishing waters, which the EU has said is a prerequisite to an overall agreement.

Barnier said the EU would not agree to a deal without a "balanced, sustainable and long-term agreement" on fisheries.

The EU wants to maintain the same reciprocal access as now, while Britain would like to have agreements on different zones, but not full access.

"We cannot agree arrangements that are manifestly unbalanced and against the interests of the UK fishing industry," Frost said.

Key hurdles remain also on data protection, the role for the European Court of Justice, and access for UK financial services firms to the bloc.

Barnier acknowledged a letter sent by the UK recently raising concerns that some EU countries have not secured the rights of UK citizens after Brexit.

The French politician said the commission will publish guidelines for EU countries on the issue.

One more round

One more round of talks remain in June before the political leaders get together and assess whether a deal is possible at all.

Barnier said the EU will not make an agreement at any price.

The economic disruption caused by the lack of an agreement would hurt economies on both sides of the channel aggravating the economic downturn stemming from the pandemic, but would be felt more in Britain.

"We very much need a change in EU approach for the next round beginning on 1 June," Frost said.