European lawmakers listen to European Commission President Ursula von der Leyen's speech during a plenary session at the European Parliament in Brussels, Dec 16, 2020. (FRANCISCO SECO/AP)

The European Parliament set a Sunday deadline for negotiators to reach a post-Brexit trade deal as they battle over fishing rights, the final obstacle to an agreement.

The European Union’s assembly will only be able to ratify an accord before the transition period expires on Dec 31 if one is reached by Sunday evening, its spokesman said in a text message on Thursday. In London, Cabinet Office Minister Michael Gove said parliament would be recalled from its Christmas vacation next week if needed to ratify any agreement.

The UK and European Union are heading for a final battle over fishing rights as trade talks reach a climax, with officials cautiously predicting a deal within days.

The European Union’s chief Brexit negotiator, Michel Barnier, said it will be “difficult but possible” to reach an agreement on Friday, according to AFP. Earlier, he said the talks had made good progress - but warned that “last stumbling blocks remain.”

UK Prime Minister Boris Johnson’s office said that Parliament, which will go into recess Thursday, could be recalled as soon as next week to approve any deal that is reached

And UK Prime Minister Boris Johnson’s office said that Parliament, which will go into recess Thursday, could be recalled as soon as next week to approve any deal that is reached. “Parliament has long shown it can move at pace and the country would expect nothing less,” 10 Downing Street said in a statement.

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But people close to the negotiations warned that the differences between the two sides on what access EU boats will have to UK waters are still substantial - and failure to reach an agreement would scupper the entire deal.

“On fisheries, the discussion is still very difficult,” European Commission President Ursula von der Leyen told the European Parliament. “In all honesty, it sometimes feels that we will not be able to resolve this question.” But her tone was largely upbeat, saying there was now a “narrow path” to a deal.

In another sign that an accord may be within sight, Johnson softened his pessimistic rhetoric about the chances of a deal. Asked at a press conference Wednesday if he still stood by his Sunday claim that the “most likely” result is no deal, he demurred.

“That is very much a matter for our friends,” Johnson said. “They know what the parameters are.”

Officials said the discussions on fisheries will probably take some days before there can be talk of agreement. Negotiations are stuck over how long the transition period should be before any new rules and quotas apply. The UK has pushed for three years; the EU wants longer.

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The two sides are also at loggerheads over how frequently access would be renegotiated: The UK wants to do it annually, but the EU wants a longer-term arrangement.

While the other major sticking point, the level competitive playing field -- which for months looked like it could collapse the negotiations -- isn’t completely resolved, the two sides are much closer, officials said.

Cross-retaliation

The UK has given up on its longstanding opposition to cross-retaliation -- the idea that either side can use a breach in one area of the agreement to slap retaliatory tariffs or quotas in another. It has also pledged not to roll back from current EU labor, social and environmental standards after Dec 31, according to officials.

But there’s still disagreement on what happens if the EU’s standards get tougher over time. Initially, the bloc wanted the UK to change its rules in lockstep. Now, both sides have agreed to an independent mechanism that would allow for some divergence, but the details of this are yet to be completely nailed down.

In Berlin, German Chancellor Angela Merkel repeated that the EU is prepared for no deal.

“The Commission is again negotiating, with all our agreement, in these hours and days until the end of the week, to see if there can still be a solution,” she told Germany’s lower house of parliament. “There has been progress -- but no breakthrough.”

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If the two sides bridge their differences and Britain’s Parliament is recalled to vote on any trade deal, its proceedings will be adapted to focus exclusively on passing the legislation and it may start sitting at an earlier time, Johnson’s office said.