Brussels rejects plea from Theresa May to break Brexit deadlock

European Union diplomats have rejected Theresa May’s conference pitch that Brussels must move first to break the deadlock over Brexit negotiations.

While the British government insists the ball is in the EU’s court, European diplomats speak of a more complex diplomatic dance, in which both sides publish papers during an intense negotiating period leading up to a crunch summit on 18 October.

Officials also repeated warnings that the EU will not accept the economic part of May’s Chequers plan, fearing it would hand British business a permanent competitive advantage, over EU rivals.

In interviews ahead of the conference the prime minister said the EU had to tell the British government what “detailed concerns” it had about her Chequers compromise plan. “If they’ve got counterproposals, let’s hear what those counter-proposals are,” she told the BBC’s Andrew Marr show.

On Monday the Brexit secretary Dominic Raab told Tory delegates that the EU’s “theological approach” allowed no room for serious compromise. “If the EU want a deal, they need to get serious. And they need to do it now.” In an interview with the Sun, he said the EU had not offered credible alternatives to the UK government proposals. “The ball is in their court.”

Rejecting this characterisation, an EU source said both sides had to move if the talks were to progress: “In a way the ball is just as much in the UK’s court as the EU’s. We are at a point in the negotiations when neither side can say ‘the ball is in your court’. If the UK doesn’t pick up the ball, we will.”

A senior source said the Brexiteer campaign to “chuck Chequers”, was driving May to a free-trade agreement with the EU – the Canada-style deal that the prime minister has rejected as not good enough. “I can’t see how May the week after [party conference] can say: ‘You wanted to chuck Chequers. Well, we can stay in the customs union and single market.’ I think the dynamics are driving the UK to an FTA rather than an upgraded form of Chequers.”

The EU’s chief negotiator, Michel Barnier, is drafting a non-binding political declaration on the future relationship with the UK. A senior diplomat said “counter-proposal would be “too strong a word” to describe this document, which has been planned for a long time.

Linked to that text, Barnier is drawing up “improved” proposals on the Irish backstop. The backstop is the European commission’s fallback plan to prevent a hard border on the island of Ireland, but May has said no British prime minister could ever accept Barnier’s version, which would keep Northern Ireland subject to many EU rules.

The text of both documents is being tightly guarded by the European commission, leaving EU member states in the dark.

Meanwhile the EU awaits the British government’s own counter-offer on the Irish backstop, after May promised alternatives that “preserve the integrity of the UK, in an angry speech after her bruising experience at last month’s Salzburg summit.

The British government’s complaints that the EU has not explained its reasons for rejecting the economic and customs plan of Chequers has been given short shrift in Brussels. “[May] said the EU had never explained, which is in fact not true,” said one diplomat.

According to Brussels insiders, Barnier gave Raab a detailed briefing of the EU’s objections to the common rulebook, the centrepiece of the Chequers’ economic plan, allowing free movement of goods between the EU and UK.

Barnier’s briefing notes, a three-page paper of “defensive points”, explain the commission’s problems with the common rulebook, across different industries. “The UK proposal would lead to a diversion of trade and investment in the UK’s favour and to the disadvantage of member states’ business,” states the unpublished document.

It outlines how the UK could gain an advantage in some industries, if it only had to follow EU product standards, rather than broader social and environmental protection rules. In the European steel industry, for example, only 1% of the cost of regulation is linked to EU product standards, while 99% comes from EU rules on energy and climate change, according to the document.

The document also explains why the commission is ready to hand an economic advantage to Northern Ireland, by keeping it in the customs union and subject to many (but not all) single market rules. EU insiders have worried that its Northern Ireland plan is a form of “cherry-picking”, but conclude it is necessary to preserve peace, while the size of the region means there is no serious risk. “With a population of 1.8m, Northern Ireland is much less of a competitive threat than the 60m UK.”

High-level Brexit talks are on hold, as the EU awaits the prime minister’s speech on Wednesday.

Although Jeremy Hunt’s speech on Sunday comparing the EU to the Soviet Union has been criticised, Brussels insiders said they had expected heated rhetoric from the conference hall. “That was really stupid,” one diplomat told the Guardian, but added the comments were unlikely to have any impact on negotiations. - The Guardian, UK