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A post-Brexit agreement between the United Kingdom and the European Union is "still possible," said the block negotiator when he signaled "scope for flexibility" regarding key issues in the talks.
Mr Barnier said on Wednesday at an online seminar that his team was ready to work on a "credible and operational" framework for the EU's commitments to a level playing field.
The bloc wants Britain to agree on a close match between the two sides' rules on state aid, environment and employment rights in exchange for high access to its internal market.
However, the UK has argued that similar conditions have not been imposed on EU trade agreements with countries like Canada or Japan.
Mr Barnier said of the dispute: "We are ready to work on landing areas that respect the EU mandate on this point, as well as on fisheries, governance and some other issues that differentiate us."
And he added: “We are ready to work on operational and smart compromises, but not at the price, never at the price of dissolving the internal market. Never."
The negotiator warned: “The same competitive conditions are not for sale. It is a central part of our trading model and we refuse to compromise for the benefit of the UK economy. "
The comments preceded an "intensified" discussion between the two sides, which are also arguing over access to British fish waters and the role of the European institutions in regulating an agreement.
British officials have signaled that Britain may be ready to allow Brussels to introduce tariffs in areas where it deviates from the bloc's common standards.
Boris Johnson said he believes an agreement can be reached by the end of July, despite the EU targeting October.
Britain has decided not to request the extension of the transition period, which is currently closely aligned with the EU and expires at the end of this year, which means that both sides will have to reach agreement by the end of this year.
"The ball is in the British court," said Barnier. "I think the deal is still possible."