Media reports from the U.K. suggested there had been some progress in talks in recent days, despite the lack of a breakthrough. No new deadline for the discussions was set by the EU and U.K. leaders. The U.K. left the EU in January but it agreed to keep the same standards and regulations until the end of the year, so both sides would have time to develop new trading arrangements.
However, this transition period ends in less than three weeks and there are serious concerns that they will not have a new agreement ready by then. Failure to get an agreement in the coming weeks, a so-called no-deal Brexit, could push up taxes and costs for exporters on both sides. The Brexit negotiations are particularly difficult because it’s the first time in the EU’s history that both parties are looking to diverge from a current set of rules. Traditionally, new trade deals result in an harmonization of food, labor and other standards.