Goal for full Brexit deal in 2020 ‘impossible’ – EU

The European Union is on course for a clash with British Prime Minister Boris Johnson after Commission President Ursula von der Leyen warned it will be "impossible" to get a full deal before his year-end deadline.

In her first major intervention on Brexit since she took up her post on Dec. 1, Ms. von der Leyen said the EU is "ready to work day and night" to strike a deal but warned Mr. Johnson that there isn't time for detailed negotiations on all aspects of the U.K.'s future relationship with the EU.

The time is "very, very tight," Ms. von der Leyen told an audience at the London School of Economics ahead of a meeting with Mr. Johnson later in the day. "It's not all or nothing, it's a question of priorities," she said. As the two met, Mr. Johnson's spokesman, Jamie Davies, hit back, insisting the U.K. is still aiming for a Canada-style free trade agreement by the end of the year.

After nearly three years of bad-tempered negotiations on the U.K.'s withdrawal from the EU, both sides are now digging in on the next phase of talks as Britain prepares to leave the bloc on Jan. 31. Once the separation is complete, negotiations will formally open on the future trading relationship between the U.K. and the EU.

But there will be just 11 months left to finalize the partnership deal before the status quo transition period runs out at the end of December, leading potentially to another threat of a cliff-edge change in trading rules at the start of 2021.

Buoyed by last month's election victory, Mr. Johnson wants an ambitious free-trade agreement and has ruled out keeping the U.K. tied to EU laws beyond Dec. 31. His office said he was telling Ms. von der Leyen that voters expect negotiations to conclude on time by the end of 2020.

"We leave on Jan. 31, and then we are keen to start negotiations as soon as possible after that," Mr. Davies told reporters in London. "We want a Canadian-style FTA by the end of the year."

But the negotiations could be even trickier than settling on the terms of Britain's divorce proved to be. The future agreement should cover areas as diverse as the trade in goods and services, security cooperation, data sharing, fishing quotas and the rules under which European nationals can work in Britain.

"It is basically impossible to negotiate all of what I've mentioned," Ms. von der Leyen said.

Another British official, Mr. Johnson's press secretary, told reporters that the U.K. doesn't want to negotiate under the principle of "nothing is agreed until everything is agreed," which characterized the first phase of negotiations. This suggested a phased approach is possible, potentially leading to a slimmed down trade agreement.

Ms. von der Leyen reiterated a message that the EU has given since even before the first Brexit talks started: the bloc has red lines on which it simply won't budge.

"Without the free movement of people, you cannot have the free movement of capital, goods and services," she said. "Without a level playing field on environment, labor, taxation and state aid, you cannot have the highest quality access to the world's largest single market."

Speaking on the edge of the City of London's financial center, the commission president made a point of singling out how Mr. Johnson's negotiating position will impact the U.K.'s financial services industry's easy access to European markets.

"This is over," she said. "All will change." Instead, she said, British firms may get more limited access on a sector-by-sector basis. "But that is a decision unilateral from the EU," she added.

As Ms. von der Leyen emphasizes the limits of what the U.K. can expect, some of Mr. Johnson's supporters are looking for him to put more pressure on the EU by opening trade negotiations with other countries like the U.S. Mr. Johnson's spokesman James Slack told reporters on Monday that the U.K. would be able to start such talks after it has left the EU on Jan. 31.

"We are ready to design a new partnership with zero tariffs, zero quotas, zero dumping," Ms. von der Leyen said. "A partnership that goes well beyond trade and is unprecedented in scope."

"We should be optimistic," she added. "We need to be optimistic."