If there is no deal, New Year's Day will bring huge disruption, with the overnight imposition of tariffs and other barriers to U.K.-EU trade.
Canada and Britain have struck a new trade deal, beating the Dec. 31 Brexit deadline that would have triggered new tariffs on a range of Canadian exports.
It added uncertainty to the negotiations as a deadline looms ever closer and both sides are still divided on three key issues.
British Prime Minister Boris Johnson has called the devolution of powers to Scotland "a disaster", a comment that played into the hands of Scottish nationalists as recent polls show a majority of Scots now support independence.
Prime Minister Justin Trudeau says "bandwidth" in the British government remains a challenge.
The House of Lords voted to strip clauses ministers say are needed to protect Northern Ireland, but would also break international law in a "specific and limited" way.
The new deal comes as Britain continues to struggle to agree on a pact with its closest trading partners in the European Union.
European Union leaders say a trillion euros worth of trade could be sunk if London does not budge on fisheries, fair competition and solving disputes.
On Monday, British Prime Minister Boris Johnson’s spokesman said the U.K. still viewed this week’s talks as crucial.
If passed into law, the Internal Market Bill would undermine the EU's previously agreed oversight of trade to and from Northern Ireland.
The bill seeks to protect free trade between Britain's four nations once a Brexit transition period ends, but has soured relations with Brussels just as time is running out to reach a deal on their long-term relationship.