The Brexit transition period, sometimes called the implementation period, will end on December 31.
But with weeks to go and after years of fraught negotiations, the United Kingdom and European Union are still attempting to hash out a trade deal on the terms of their future relationship.
Both sides warn that time is running out amid division over key issues, including fishing rights, competition rules and the governance of any trade treaty.
EU chief negotiator Michel Barnier and his UK counterpart David Frost are holding make or break talks in London this week.
On December 31, the UK will leave the EU’s single market and customs union.
This will usher in changes for how people travel, live and work regardless of whether a deal is struck.
Freedom of movement between the UK and the EU will end as of January 1, and businesses trading across the EU border will need to fill out significantly more paperwork, with importers and exporters required to make customs declarations.
The UK and the EU are believed to be edging closer to a deal, but a number of sticking points are proving difficult to resolve.
Frost suggested a “deal is still possible” in a series of tweets on Friday, but warned that any agreement must “must fully respect UK sovereignty”.
“That is not just a word – it has practical consequences. That includes: controlling our borders; deciding ourselves on a robust and principled subsidy control system; and controlling our fishing waters,” he said.
On the EU side, Barnier warned on Friday that “significant divergences persist”.
The UK and EU disagree on how much access European fishing boats should have to British waters, and how much they would be allowed to catch from the beginning of 2021 onwards.
London and Brussels are also at odds over how strictly the UK should follow the EU’s level playing field provisions – concerning competition laws, in particular – once it exits the bloc’s single market.
Further complicating matters, London and Brussels are divided over how any rules drawn up would be enforced following a deal.
Any deal will still need to be signed off by EU leaders, who are due to hold their next summit on December 10, and the UK’s Parliament.
If no deal is brokered, the UK and EU will be forced to trade according to World Trade Organization rules, which will see financial tariffs, quotas and other regulatory barriers come into play.
The measures could be hugely disruptive for businesses and very costly for the UK and the EU.
The UK would also have no access to the EU’s energy market, and no binding agreement on police and judicial co-operation in the event of a so-called “no-deal” Brexit.
UK PM Boris Johnson said on Friday there was a deal “to be done” if EU officials “want to do it”.
But he cautioned that there are “substantial and important differences still to be bridged”, stating the likelihood of any agreement would be “very much determined by our friends and partners in the EU”.