German Chancellor Angela Merkel said on Wednesday that the European Union and Britain could still reach a Brexit trade agreement as PM Boris Johnson prepares for make-or-break talks in Brussels.

“There is still the chance of an agreement,” Merkel told the Bundestag, the lower house of parliament. “We are continuing to work on it, but we are also prepared for conditions which we cannot accept.”

One thing is clear, Merkel said, and that is “the integrity of the internal market must be preserved.” She stressed that a level playing field is needed for tomorrow and beyond, otherwise, “unfair competition conditions arise to which we cannot subject our companies.”

Fair business competition rules, fishing rights, and the dispute-resolution mechanism are still three main sticking points Brussels and London must resolve before the UK finally leaves the EU next year.
These three big questions will be discussed over a three-course meal when PM Johnson meets European Commission President Ursula von der Leyen in Brussels on Wednesday.

Merkel said Germany has full confidence in the Commission to pursue the Brexit negotiations, but many UK and EU politicians doubt the dinner in Brussels may result in a deal.

Cabinet Office Minister Michael Gove told Times Radio only that conversation between Johnson and von der Leyen “I hope, will create further political momentum, which will make sure that we do reach an agreement.”

Gove sees “scope for compromise” on fisheries in the talks on the post-Brexit trade deal, but he stressed “what is not up for compromise is the principle that the UK will be an independent coastal state… with the UK in control of our waters.”

On Tuesday, London and Brussels agreed on how to manage the Ireland-Northern Ireland border, and many still hope this could help them to clinch a wider trade deal.

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