EU, Britain quickly approaching make or break moment in trade talks - EU diplomat

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FILE PHOTO: A British Union Jack flag flutters outside the European Parliament in Brussels

BRUSSELS (Reuters) - Britain and the European Union are quickly approaching a make or break moment in talks on a trade deal and it is not clear if an agreement can be reached because of differences on three main issues, an EU diplomat said on Wednesday.

The EU and Britain are negotiating a trade deal that would regulate their business relationship from next year, after the end of Britain's transition period after its exit from the EU.

But negotiators cannot overcome differences on fisheries, state aid for companies and future dispute resolution.

"We are quickly approaching a make or break moment in the Brexit talks. Intensive negotiations are continuing in London. As of this morning it is still unclear whether negotiators can bridge the gaps on issues like level playing, governance and fisheries," the EU diplomats said.

"As we are entering the endgame of the Brexit negotiations, some member states are becoming a bit jittery. So this was mostly an exercise to calm nerves in Paris and elsewhere and to reassure member states that team Barnier will continue to defend core EU interests including on fisheries," the diplomat said.

(Reporting by Jan Strupczewski and John Chalmers)