Britain must move now to bag new EU deal this year, EU Brexit negotiator says

By Padraic Halpin and Conor Humphries

DUBLIN (Reuters) - Britain must engage now with EU demands on guarantees of fair competition, fisheries and solving disputes in order to seal a deal on new trade ties by a "strict deadline" of end-October, the EU Brexit negotiator said on Wednesday.

Michel Barnier said London has so far not shown enough flexibility and creativity on these. But he believed a deal on a new relationship to replace decades of close-knit cooperation after Brexit from 2021 was still possible, if difficult.

"On all these issues the UK side continues to disappoint," Barnier told a seminar. "These are no technocratic issues. At stake are tens of thousands of European jobs and livelihoods.... our safety and wellbeing, our environment and climate, our fundamental rights."

Britain became the first country to leave the EU last January and is now in a standstill transition period to allow both sides to agree a new deal on everything from trade to security to nuclear cooperation.

A UK source described Barnier's comments as "a deliberate and misleading caricature" of British proposals and said they were aimed at deflecting scrutiny from the EU's own "unrealistic" positions.

Britain was simply seeking an agreement similar to those agreed with other like-minded countries, the source said.

Barnier said Prime Minister Boris Johnson's government was shunning the EU's demands for clarity on Britain's future state aid system and that there would not be a deal without a "long-term, balanced and sustainable" deal on fish.

"How can we conclude our long-term economic partnership agreement ... without knowing which system of state aid or subsidies the UK will put in place, without any assurance that the UK will not use its new regulatory autonomy to distort competition with us in the future?" Barnier said in a speech organised by an Irish think tank.

"We are ready and we want a deal - but not at any price. We will never seal a deal to the detriment of our single market."

Barnier said that, while there was some progress on the British side in implementing provisions of an earlier divorce agreement on the sensitive Irish border, he was "worried and disappointed" by insufficient overall progress.

Barnier saw his British counterpart, David Frost, in London on Sunday and told the seminar London has so far not budged ahead of a full negotiating round due next week.

The EU side now doubts a deal can be sealed in time for approval at Oct. 15-16 summit of the bloc's 27 national leaders in Brussels and Barnier also said the strict deadline was the end of that month to give enough time for ratification by 2021.

"We have no more time to lose," Barnier said.

(Reporting by Padraic Halpin and Conor Humphries, Writing by Gabriela Baczynska, Editing by Andrew Heavens and Nick Tattersall)