EU negotiators say that the Brexit agreement is "very close" but details are missing

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BRUSSELS (Reuters) – Brexit negotiators in the European Union believe that a divorce agreement with Britain is "very close", diplomatic sources said, in a sign that a compromise on the most controversial issue – the future border Irish – could be underway scarce.

PHOTO FILE: An official inspects a Union Jack flag next to the flag of the European Union, in view of a meeting between the British Secretary of State for the closure of the European Union, Dominic Raab and the chief negotiator of Brexit, Michel Barnier, at the headquarters of the European Commission in Brussels, Belgium, 19 July 2018. REUTERS / Francois Lenoir

The EU reported Thursday that it was engaging with new emerging proposals in Britain on how to avoid extensive border controls between the British province of Northern Ireland and Ireland, a member of the EU , after Brexit, the critical potential for breaking negotiations to end for forty years of union.

A member of the Brexit group of EU negotiators, Michel Barnier, told a national diplomat yesterday in Brussels that a divorce pact with Britain was "very close", according to two sources present.

"We are going in the right direction," a senior EU diplomat said separately of the Irish correction work.

Two days of cautiously positive comments from Brussels helped to strengthen the pound, but Britain has not yet formally submitted any new proposal to the European Union in writing.

On Friday evening, EU Brexit negotiators told the ambassadors of the 27 states remaining in the bloc that there was still no progress on the Irish question and much would depend on what their British counterparts will bring to Brussels the week next.

The two sides are trying to push the divorce agreement and an agreement on post-Brexit reports on the line in time for the leaders' summits scheduled for October 17-18 and November 17-18.

According to the plan described by the sources of the EU, Britain would renounce to insist only on an Irish limited-time emergency border solution. Britain would get its way by making sure that the whole of the United Kingdom – rather than Northern Ireland – stays in a customs union with the block if the backstop is activated.

Irish Prime Minister Leo Varadkar, speaking in Brussels on Thursday, urged Britain to present new proposals well before the EU summit in less than two weeks to allow sufficient time for analysis. Sources in Brussels say the devil is in the details.

"Negotiations are not easy because we must also be critical in receiving different signals from London," said the head of the European Commission Jean-Claude Juncker in Austria.

"It's a polyphonic choir at the level of the British cabinet and we try to organize the pieces … so that they become a melody," he said, referring to the divisions inside the government of Prime Minister Theresa May on terms of Brexit.

Any such compromise would leave the EU worried that Britain would be able to use the special access of Northern Ireland to the block's single market to sell cheaper goods that would not adhere to work, to the environment and other EU regulations.

The bloc worries that London will seek to use that unique trade agreement as a building block for the future global business relationship and gain an unfair competitive advantage.

CANADA +++

For Britain, the problem is the acceptance of controls on goods and livestock with Northern Ireland, something that is strongly opposed by the Democratic Unionist Party of the province, according to which the May votes depend from the government.

The British ministry of Brexit said on Friday that the new London proposals on the Irish border would preserve the integrity of the United Kingdom.

While the EU is pushing London on the Irish question, the 27 states remaining in the bloc are also concretizing their proposal on future ties with Britain.

The president of the EU leaders, Donald Tusk, said today that "Canada plus plus plus" was offered, namely an advanced free trade agreement combined with close security ties, close cooperation on business matters global and research, among other elements.

Another high-level EU diplomat said that the EU will propose "zero tariffs and zero quotas" in trade with Britain after Brexit, which would go beyond what the blockade has with Canada.

A proposal like this goes very well with May's critics at home who support a more intransigent division with the EU than it is looking for. But for the European Union an Irish backstop would be an essential part of any such offer, which, in turn, is not to the liking of the Brexiteers, who do not want the means of Great Britain to make independent trade agreements limited by remaining in a customs union.

Any agreement between May and other EU leaders must be approved by both the EU and the British parliaments, another obstacle to be clarified to avoid the most damaging scenario in which Britain leaves the blockade with little room to mitigate the economic shock.

"Time is running out, all the partners know it," a spokesman for the German government said. "Britain coming out without an agreement would not be in the interest of Britain, Europe or Germany".

Reporting by Gabriela Baczynska and Alastair Macdonald; Other reports by Guy Faulconbridge and Sarah Young in London, Jan Strupczewski in Brussels, Kirsti Knolle in Vienna and Michelle Martin in Berlin; Editing by Mark Heinrich

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