The EU announced Friday it will work on a post-Brexit free trade agreement modelled on the bloc's deal with Canada, saying Britain's insistence on leaving the single market and customs union left no alternative.
The bloc's chief Brexit negotiator Michel Barnier said once Britain's conditions -- which also include ending its participation in European freedom of movement -- were applied, all that was left was a "free trade agreement on the Canada model".
"It's not us, it's our British friends who are giving these red lines which close certain doors. So it will be on this model that we will work," Barnier said after a hard-won agreement on divorce terms that was sealed in Brussels.
The remarks will come as a blow to London, after Prime Minister Theresa May rejected a Canada-style deal during a key speech in Florence in September, instead calling for the two sides to design a new "ambitious economic partnership".
The hard-fought free trade agreement between the EU and Canada, which took seven years to craft, entered provisionally into force in September despite opposition from activists worried about its impact on the environment and health.
After almost six months of negotiations, the European Commission, the EU executive, said Friday it "recommends sufficient progress" had been made by Britain on separation issues including the Irish border, Britain's divorce bill, and citizens' rights.
This paves the way for EU leaders at a summit on December 14-15 to open the second phase of Brexit negotiations, covering trade talks and a transition period.
But EU President Donald Tusk warned that talks on the future relationship would be even harder than the first round.