UK and EU extend Brexit talks to Sunday

European Commission President Ursula von der Leyen, right, welcomes British Prime Minister Boris Johnson prior to a meeting at EU headquarters in Brussels, Wednesday, Dec. 9, 2020.

Brussels (CNN)British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen have agreed to extend foundering Brexit trade talks until Sunday.

After in-person discussions in Brussels that lasted hours, both sides said Wednesday evening that they remained far apart on key issues and a decision on the future of the talks would be made by the end of this weekend.
For months, the European Union and the United Kingdom have been trying to agree on a trade deal before the Brexit "transition period" ends on December 31. Earlier this week, a joint statement by Johnson and von der Leyen cited three "critical" sticking points: fishing rights, the UK's ability to diverge on EU standards, and legal oversight of any deal.
    The last-ditch effort to propel talks forward on Wednesday began with a meeting and continued over dinner.
    In a statement after the meeting, von der Leyen said negotiators would resume work immediately. "We had a lively and interesting discussion on the state of play across the list of outstanding issues. We gained a clear understanding of each other´s positions. They remain far apart," she said. "We agreed that the teams should immediately reconvene to try to resolve these essential issues."
    A senior No. 10 source also told CNN that "very large gaps remain between the two sides and it is still unclear whether these can be bridged" but that the Prime Minister "does not want to leave any route to a possible deal untested."
    Failing to reach a trade deal could be particularly painful for the UK, already suffering the economic fallout of the coronavirus pandemic.
      The UK Office for Budget Responsibility (OBR), which produces economic forecasts for the government, said in November that even if London and Brussels are able to reach a deal, their new trading relationship is expected to lead to a long-run loss of output of around 4% compared to Britain remaining in the European Union.
      But a no-deal Brexit would reduce output by an additional 2% in 2021, or some £40 billion ($53 billion), and consign more than 300,000 people to the unemployment line by the second half of next year, according to the OBR.