The European Union is set to offer the U.K. a free-trade deal deeper than any agreement that’s gone before, but will reject Prime Minister Theresa May’s demand for “frictionless trade,” according to EU diplomats, Bloomberg says.
The EU’s vision for future ties with Britain will contain “about 30-40 percent” of May’s pitch for a wide-ranging trade and security deal, according to two of the diplomats. Chief negotiator Michel Barnier’s team gave European ambassadors an outline of his proposal on Friday, and will formally present it to them — at least in part — on Wednesday.
Talks are accelerating — and work is expected to continue through the weekend — as both sides are racing to clinch a deal next month. The pound strengthened on Friday.
The offer falls short of what May wants, potentially making it harder to get the deal approved in the U.K. Parliament, where she faces opposition on all sides. However, the document is expected to be vaguely worded, and with as much positive language as possible to help her sell it at home. Hardline Brexit-backers in her party might find it easier to vote for the EU’s offer instead of the tighter ties sought by May, since they have been pushing for a regular free-trade deal all along.
The risk is that because the EU’s plan doesn’t include frictionless trade across the EU-U.K. border, it will focus more attention on the most controversial part of the divorce deal — how to keep the Irish border open. It will make it even more important that the so-called Irish backstop is acceptable to the U.K. government and its Northern Irish allies.