A Brexit sign is seen between Donegal in the Republic of Ireland and Londonderry in Northern Ireland at the border village of Muff
By Gabriela Baczynska and Alastair Macdonald
BRUSSELS (Reuters) - European Union Brexit negotiator Michel Barnier said on Wednesday an agreement with Britain could be "within reach" next week, calling for decisive progress in the talks in time for a summit of all 28 EU leaders.
Negotiators from both sides have been locked in talks this week to overcome differences on the biggest outstanding hurdle to a deal - how to keep the UK frontier with the Irish republic free of border checks after Britain leaves the EU in March.
Barnier told small business leaders that the talks were "continuing intensively this week, day and night, with the aim ... of having a deal within reach, if we follow through to the end of this negotiations, on Oct. 17."
Leaders of the 27 countries that will remain in the EU meet in Brussels on Oct. 17, a day before British Prime Minister Theresa May joins the summit.
Barnier reiterated that as much as 85 percent of a withdrawal agreement had already been agreed, boosting the pound on financial markets. Policing of the deal and agreeing rules on produce such as camembert cheese and Parma ham that is protected inside the EU against imitations from elsewhere needed more polishing, he added.
He also stressed the EU's insistence that Britain must accept possible checks on goods moving between its mainland and its province of Northern Ireland, saying Brexit will trigger the need for customs, value-added tax and compliance checks with EU standards.
Both sides want to avoid a return to checkpoints on the Irish border as this would hinder trade and risk reigniting violence in the province two decades after a peace deal.
Barnier said customs forms could be completed in advance online and the "only visible systematic checks" would involve scanning bar codes on lorries or containers on ferries or in ports.
For industrial goods, he said it could be done by "market surveillance authorities" in company premises but he added that checks on animals and animal-derived products would still have to take place on the border.
"Our challenge is to make sure that these procedures are as easy as possible and not burdensome," he said in his speech in the European Parliament, which ended with a standing ovation.
However, a small Northern Irish party which supports May's minority government in the Westminster parliament vehemently opposes any checks between the province and the rest of Britain.
Barnier said he realised such checks were politically difficult but this was the consequence of Britons voting to leave the EU.
He reiterated the EU's line welcoming May's proposals for a bold free-trade deal "without tariffs or quotas" and close security ties after Brexit.
But he stuck to the EU's rejection of London's plan for a "regulatory framework for goods", saying it would give Britain an unfair competitive advantage by allowing access to parts of the bloc's single market without ensuring the country honours all of its conditions.
"DAY AND NIGHT" TALKS
The 27 EU states will get an update on the negotiations at a meeting of national ambassadors, without Britain, on Friday evening. The sides will continue negotiations through the weekend with hopes for a breakthrough as early as Monday.
The 27 EU leaders meeting next Wednesday in Brussels want to be able to announce "decisive progress" on the Brexit deal to agree to hold another summit in November. That would be to finalise work on a declaration of close future ties with Britain that would also be part of the Brexit package.
Both the EU and Britain have signalled progress in recent days, boosting sentiment in financial markets which fear the most damaging no-deal Brexit. Barnier said the cost of such a development would be "very high" for Britain but also some sectors of the EU economy, such as the car industry.
"That is why the no-deal is not and has never been our (preferred) scenario, even if our responsibility is to be prepared," he said.
The European Commission also looked at preparations among the 27 states for multiple disruptions that this would involve, including customs checks and duties kicking in immediately on all imports and exports.
(Reporting by Gabriela Baczynska and Alastair Macdonald, additional reporting by Alissa de Carbonnel and Daphne Psaledakis; Writing by Gabriela Baczynska, Editing by Angus MacSwan, Janet Lawrence and David Stamp)