Brexit latest: EU diplomats will rethink trade deal if Theresa May waters down demands

Theresa May welcomes Donald Tusk to Downing Street earlier this week
REUTERS
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EU leaders today warned the Government to get “real” on Brexit as they demanded far quicker progress on key trade talks.

On the eve of an EU summit in Brussels, they also stressed that plans for Britain crashing out of the EU with no deal needed to be stepped up.

However, they also opened the door to Theresa May being able to clinch a pro-business trade deal if she is prepared to ease back on earlier demands.

With an increasing number of businesses in the UK warning of job losses if there is a “hard Brexit”, Mrs May’s government is coming under spiralling pressure to try to maintain close economic ties to the EU, however possible.

However, the Cabinet is deeply divided over the future trade relationship and whether Britain would fare better by sticking close to EU regulations and customs rules rather than severing links with a clean break. Mrs May will take Cabinet ministers away for a crunch meeting at the Prime Minister’s country retreat Chequers — expected to be next week — in a bid to thrash out an agreed position.

EU diplomats will agree to “reconsider” their basic free trade offer of last March if Britain in turn reverses its bid to leave the single market and customs union.

However, the leaders are growing increasingly exasperated that the Government is so deadlocked.

With Bulgaria currently holding the presidency of the EU Council, its foreign affairs minister Ekaterina Zaharieva said: “With March 2019 quickly approaching, we need to find solutions to all remaining issues in a timely manner and in full respect of commitments taken so far.

“Regarding the framework for the future relationship, we need realistic and workable proposals from the UK as regards its position. The work on preparedness at all levels and for all outcomes must be stepped up.” EU diplomats say that EU leaders will use the Brussels summit, tomorrow and on Friday, to send a “clear and sharp” message to the UK.

Brexit is way down the list of summit priorities, with EU leaders grappling with a resurgent refugee crisis, a trade war with the US, and disputes over the bloc’s future budget.

However, concern is growing that so little progress has been made on the EU-UK exit treaty since leaders agreed to the idea of a post-Brexit transition or implementation period in March.

EU officials are now renewing threats to ditch the March transition deal if the UK does not come forward with a permanent “backstop” solution for an open border between Ireland and Northern Ireland.

Trade unions on both sides of the Channel are also calling for fresh urgency.

A Government source said: “We have put forward workable proposals to the EU on a range of areas from the backstop to security, and the White Paper, which will be published after the June Council, will continue to drive this process forward.

“We are confident that we can make progress if both the EU and UK engage constructively.”

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