BRUSSELS—Negotiators moved closer to an agreement on the future relationship between the U.K. and European Union, officials from both sides said, though they remained far apart on a major stumbling block: access by EU boats to British waters.
With just over two weeks to reach and ratify a deal covering economic, trade and security arrangements, European Commission President Ursula von der Leyen told EU lawmakers it remains impossible to say with certainty whether an agreement is coming together.
Failure to reach a deal would mean from Jan. 1 tariffs would be applied for the first time in almost a half-century on some trade between the U.K. and the EU. The U.K. sends 43% of its exports to the bloc.
But in comments that echoed views of people involved in the negotiations, Mrs. von der Leyen checked off a series of issues where the two sides have narrowed or resolved differences linked to a central EU demand: that the U.K. commit to standards on issues such as state aid, labor and environmental regulation that will ensure fair competition once Britain leaves the bloc.
That includes progress on defining the rules around U.K. state-aid decisions and their enforcement, and the ability of the EU to take punitive action if the agreement is breached.