BRUSSELS (BLOOMBERG) - Britain and the European Union will negotiate on Brexit "continuously" from now on, the bloc's chief negotiator Michel Barnier said, with time running out to avoid Britain crashing out without a deal.
"The negotiations are now entering the final stage," Barnier told reporters in Brussels after meeting Brexit Secretary Dominic Raab on Tuesday (Aug 21).
"We can find common ground" but it will need Britain to "respect the single market."
With talks at a virtual impasse for weeks, the two sides are rushing to reach a deal on the terms of Britain's withdrawal by October. That's to give time for lawmakers to ratify it before Britain is due to leave in March.
With time so short, markets have fixated on when a breakthrough might happen this year.
Barnier would not commit to October as the long-planned deadline for the completion of the accord, but reiterated it couldn't be much later than that - so November is a possibility, one that has been touted in private and public before.
It has to be "well before the end of the year," Barnier said.
The pound pared earlier gains, up 0.5 per cent at US$1.2857 as of 5.10pm in London as the news conference by Brexit's two main negotiators failed to give sterling fresh impetus.
In parallel, negotiators are trying to sketch out the foundations of Britain's future trade, economic and security relationship. Barnier's comments on the need for Britain to "respect" the EU's single market are significant.
It indicates that the British government will not succeed in its aim to remain in the bloc's rules for trade in goods but to go it alone in services. That could make Prime Minister Theresa May's job of selling the deal to Parliament even more difficult.
"There are still some significant issues to overcome, yes on Northern Ireland, but also on the future relationship," Raab said. "We agreed to step up the intensity of the negotiations."
Most of the withdrawal deal has been concluded between Britain and the EU. But the difficult topic of preventing the emergence of a policed border between Northern Ireland and Ireland is unresolved, with Britain rejecting the EU's plan to keep the British province in the bloc's customs union.
That issue will dominate talks between now and a summit of EU leaders in mid-October. Negotiations continue in Brussels on Wednesday and Raab said he and Barnier will meet again next week.
In July, the EU rejected May's customs proposal, a key part of her vision for future trade with the bloc. It would see Britain collecting the EU's tariffs on goods entering.
