By Robin Emmott and Alistair Smout
BRUSSELS/LONDON (Reuters) -The European Union's executive on Thursday laid out contingency plans for a 'no-deal' Brexit at the end of the year to limit disruption to air traffic, and road and rail travel after talks between British and EU leaders failed to break an impasse.
The European Commission also proposed that Britain and the EU continue to offer reciprocal access to their fishing waters for up to a year, potentially easing tension around one of the most emotive sticking points in the trade negotiations.
Britain told the EU earlier it should make significant concessions to break the deadlock by the end of the weekend for clarity about the finale to the five-year-old Brexit crisis.
Prime Minister Boris Johnson and the EU's chief executive, Ursula von der Leyen, gave themselves until Sunday to decide on their next steps after failing to overcome persistent rifts over a "lively" dinner of turbot on Wednesday.
"There's still clearly some scope to keep talking but there are significant points of difference that remain," Foreign Secretary Dominic Raab told BBC TV, adding that both sides needed to take stock at the weekend.
"Sunday I think is an important moment," Raab told Sky News. "You never say never in these talks, but I think we do need to get some finality."
Raab said the main points of contention - fisheries and commitments on a level playing field - were narrow in scope but they were matters of principle for Britain.
SOFTENING THE BLOW
Britain formally left the EU in January, but has since been in a transition period during which it remains in the EU single market and customs union, meaning that rules on trade, travel and business have stayed the same.
That ends on Dec. 31. If by then there is no agreement to protect around $1 trillion in annual trade from tariffs and quotas, businesses on both sides will suffer.
Failure to agree new rules to govern everything from car parts to Camembert would snarl borders, shock financial markets and sow chaos through supply chains in a world already grappling with the economic cost of COVID-19.
Tesco (OTC:TSCDY) Chairman John Allan has warned that food prices will go up if Britain leaves the EU's orbit with no deal. Raab, asked about the remark, said there may be some changes in food prices.
The European Commission said it was still seeking a trade agreement by the year-end deadline but it could only soften some of the disruption predicted as Britain leaves the EU's orbit.
"While a 'no-deal' scenario will cause disruptions in many areas, some sectors would be disproportionately affected due to a lack of appropriate fall-back solutions," it said.
It proposed keeping "certain air services" between Britain and the EU for up to six months, provided London ensures the same. Air safety measures would continue to be recognised, to avoid grounding aircraft.
Basic connections by road freight and for road passengers would also continue for six months as long as it was reciprocal.
British transport minister Grant Shapps told a travel conference in mid-October that the UK would look to reciprocate any basic connectivity measures announced by the EU.
Britain's Department for Transport did not immediately respond when asked to comment on Thursday.
Johnson portrays Brexit as a chance to give Britain a fully independent, more agile economy. EU powers fear London wants the best of both worlds - preferential access to EU markets but with the advantage to set its own rules.
That, they say, would undermine the post-World War Two project which sought to bind the ruined nations of Europe - and particularly Germany and France - into a global trading power.
The EU wants Britain to remain tied to the bloc's labour, social and environmental standards in the future, as well as to state aid rules for corporate state subsidies.