BRUSSELS (Reuters) - The European Union responded with dismay on Wednesday after Britain proposed legislation that could snuff out hopes for a Brexit trade pact, but officials said Brussels would not walk away from talks to avoid a damaging 'no-deal' at the year's end.
Britain published a bill that explicitly acknowledges the government could break international law by ignoring some parts of the binding Withdrawal Agreement it signed with the EU in January.
Manfred Weber, who heads the largest political group in the European Parliament, branded the move by British Prime Minister Boris Johnson's government "an unprecedented breach of trust".
"By taking this route, at this point in time, a no-deal scenario is the most probable outcome of the Brexit negotiations," said Weber, who is chairman of the centre-right EPP Group. "The validity of the Withdrawal Agreement was and is a condition to our negotiations on our future partnership."
Nevertheless, EU officials said chief Brexit negotiator Michel Barnier would not suspend talks, which entered an eighth round in London this week.
"Talks will continue albeit in a tense atmosphere," said one official. "It won't be the EU walking away from the table, rest assured. Barnier will showcase himself as the one who wants a deal, which puts the UK in the position of those responsible for the mess."
Another EU official said that giving up on the negotiations on the future relationship between the bloc and Britain "would only play into the U.K. game".
Britain quit the EU in January but has remained part of its single market, largely free of trade barriers, under a status quo agreement that expires in December. It has been negotiating a trade deal to take effect from Jan. 1, but says it is willing to accept a 'no-deal' if it cannot agree favourable terms.
"RAMPING UP PRESSURE"
Without a deal, about $900 billion in annual trade between
between the world's fifth-largest economy and its largest trading bloc would be plunged into uncertainty, including rules on everything from car parts and medicines to fruit and data.
European Commission chief Ursula von der Leyen voiced strong concern about Britain's plans to pass its Internal Markets Bill, saying it would destroy trust and undermine the trade talks.
"This would break international law and undermines trust. Pacta sunt servanda = the foundation of prosperous future relations," the president of the EU's executive said on Twitter, quoting the Latin phrase for "Agreements must be kept".
Progress on agreeing a new deal has been scant since January, with both sides stepping up warnings recently of an abrupt split at the end of the year. But Britain's plans to change domestic laws in a way that could undermine its divorce deal is the biggest threat to the process so far.
"If there is to be a deal, London should have been already climbing down now instead of ramping up pressure," said an EU diplomat who leads his country's work on Brexit in Brussels.
While Johnson has said he wants a deal by Oct. 15, or London would go for a no-deal Brexit, the EU says the negotiators must have had a legal text agreed by the end of October to leave the bloc's 27 members time to ratify by the end of the year.
One EU official said Johnson's strategy with the new legislation amounted to "kicking the can down the road again" and hoping that he can clinch a breakthrough at the very last moment.
One European official said the EU needed time to assess Britain's intentions and there would be no knee-jerk response from Brussels.
"It does not makes sense to define a position on what happens next when we don't know what the British government position will be next week."
(Additional reporting by Andreas Rinke in Berlin; Editing by Angus MacSwan)
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