EU ready to offer Canada-style trade deal

EUROPEAN UNION negotiators will this week offer a Canada-style trade deal, putting pressure on Theresa May’s Brexit “red lines”.

The Prime Minister’s negotiating position – set out in a speech last week – will come under renewed pressure as the EU produces its first guidelines on the future trading relationship.

Mrs May used a BBC interview yesterday to suggest she is willing to “negotiate” on the numbers of immigrants allowed into the UK from the EU after Brexit. Mrs May said: “We’ll be setting out our immigration rules; we’ll negotiate with the EU because obviously we want to look at what happens to UK citizens as well as what happens to EU citizens.”

Mrs May suggested last week that a hard border between Northern Ireland and the Republic could be avoided through technological solutions and by exempting small businesses, which account for 80 per cent of cross-frontier trade, from checks. But Simon Coveney, who is also Ireland’s foreign min- ister, told BBC 1’s The Andrew Marr Show that he was “not sure that the Eu- ropean Union will be able to support” the plan, as it would be worried about protecting the integrity of the single market.

Michel Barnier, the European Commission’s chief Brexit negotiator, will arrive in Belfast tomorrow for talks with Michelle O’neill, Sinn Fein’s new leader, where he is expected to discuss the UK’S proposals.

The EU’S negotiating guidelines are being seen as a response to Mrs May’s major Brexit speech last week in which she repeated that a basic Canada-style deal was not good enough given the extent EU-UK trading ties.

They will only contain a very short section on customs and services – and potentially no mention at all of financial services – and will be circulated among EU member states today and tomorrow as five days of talks get under way.

A senior EU source said: “The message will be ‘this is what is feasible given the UK’S stated red lines’, but should those evolve, so would the available options.”