Brexit Talks Stall Ahead of Key Summit

Negotiators from Britain and the EU still have differences over how to avoid a physical border in Ireland

EU Chief Brexit Negotiator Michel Barnier speaks during a joint press conference with Britain's Brexit Secretary at the European Commission in Brussels on Aug. 31. Photo: Agence France-Presse/Getty Images

BRUSSELS—Negotiations over Britain’s departure from the European Union suffered a setback Sunday as the two sides failed to resolve differences, chiefly over how to avoid the re-emergence of a physical border in Ireland.

Both sides had hoped that a deal on a withdrawal agreement would be broadly settled when EU leaders meet at a summit starting Wednesday. The failure to bridge those differences during an unscheduled visit to Brussels Sunday by U.K. Brexit Secretary Dominic Raab slims the odds of a deal this week.

The setback is likely to reawaken concerns of a no-deal Brexit, and raises the question of whether the two sides have the political space to solve the thorniest problems, of which the Irish border is paramount.

The border has been a past flashpoint in Ireland’s barely submerged sectarian conflict and negotiators are seeking to avoid the need for renewed checks between Northern Ireland, which will leave the EU with the rest of the U.K., and the Irish Republic, which is staying in the EU.

In a statement, the U.K. government said negotiators had in the last few days “made real progress in a number of key areas.”

However, it said “there remain a number of unresolved issues” related to the Irish border question, which it still hoped to resolve before the summit.

A critical meeting of Prime Minister Theresa May’s cabinet is expected to discuss the issue on Tuesday and talks could still be revived in coming days.

There is still time for a broader Brexit deal to be struck before late November or December but the time available to ratify an agreement in the British and European parliaments before Britain’s scheduled departure date on March 29 is narrowing sharply.

After holding talks with Mr. Raab, the EU’s chief negotiator Michel Barnier said gaps remained.

“Despite intense efforts, some key issues are still open, including the backstop for IE/NI Ireland to avoid a hard border,” Mr. Barnier said on Twitter , shortly after he briefed member states’ EU ambassadors.

A senior EU official said no further negotiations are planned before the summit.

EU diplomats confirmed that a meeting of senior officials, planned for Monday afternoon to discuss Brexit progress, had been scrapped. EU leaders meet Wednesday evening to discuss Brexit.

Both sides have held near-constant talks at official level over the past 10 days. Hopes of a deal rose after Mrs. May emerged strengthened from the annual Conservative Party convention in early October.

Officials had said that a deal on Britain’s exit terms, a key part of the Brexit process, was possible by Monday. However, they warned that while technical progress was being made in talks in Brussels, it was not clear if Mrs. May had the political backing to drive further concessions through her government.

The two sides have been discussing two proposed solutions that together are aimed at preventing frontier checks on the island of Ireland.

In the first, Mrs. May’s government was expected to be ready to accept extra regulatory checks on goods crossing from mainland Britain to Northern Ireland, according to people familiar with the talks. This would be necessary because Northern Ireland would remain inside the EU’s single market for goods and farm products.

That suggestion is under heavy fire from the Northern Ireland’s Democratic Unionist Party, which favors the union with the U.K. and sees the proposal as a slippery slope toward a united Ireland. Mrs. May’s minority Conservative government depends on the DUP to pass legislation.

For the second, Mrs. May was expected to offer to stay in a temporary customs union with the EU for an indefinite period after Brexit. That would prevent the need for customs checks along the Irish border, but it would also prevent the U.K. striking significant new free-trade deals.

That has sparked the opposition of some senior lawmakers from Mrs. May’s Conservative Party, who object that it will leave the U.K. tied too closely to the EU.

On Sunday, Mrs. May’s former Brexit Secretary David Davis urged ministers to rebel and force Mrs. May to change her plans.

“The policy would destroy any chance of striking new trade deals with the rest of the world. Trade deals are by far the biggest economic upside for Brexit. This ill-conceived proposal is already undermining the confidence of prospective trade partners,” he wrote in the Sunday Times.

Write to Laurence Norman at laurence.norman@wsj.com