EU-UK Brexit talks to restart on Sunday despite 'significant differences'

Three critical issues are at the heart of the impasse

Talks will resume in Brussels on Sunday, with Michel Barnier leading the EU's negotiations. AFP 

"Significant differences" remain between the European Union and Britain over a post-Brexit trade deal, leaders from both sides said, with negotiators set to restart last-ditch talks on Sunday before a year-end cut-off.

Prime Minister Boris Johnson spoke on the phone to European Commission President Ursula von der Leyen on Saturday.

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A joint statement after the call said that three critical issues were at the heart of the impasse.

They are the level playing field for businesses, fisheries and the governance of any agreement.

“Both sides underlined that no agreement is feasible if these issues are not resolved," the statement said.

"While recognising 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.

“We are therefore instructing our chief negotiators to reconvene tomorrow in Brussels,” it added.

Michel Barnier, the EU's chief negotiator, said: "We will see if there is a way forward. Work continues tomorrow."

While the UK left the EU on January 31 this year, it remains in the bloc’s single market and customs union until December 31.

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May 7, 2015 - David Cameron wins General Election on the pledge to hold a EU referendum. AFP

With less than four weeks to go, both sides must also get agreement on any deal – which would govern nearly $1 trillion of trade a year – from their parliaments and the EU executive needs to get approval from all 27 member states.