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Report: EU to present no-tariff Brexit deal that still falls short of UK demands

EU negotiators will refuse U.K. Prime Minister Theresa May's request for smooth trade when Britain leaves the bloc, but they will go beyond what they have offered other countries previously, Bloomberg News reported, citing unnamed EU diplomats.

The proposal seeks to prevent the U.K. from gaining an edge in areas like labor regulations once it leaves the EU while offering no tariffs or quotas in exchange, according to the news service.

The EU and U.K. would continue to collaborate on defense and foreign policy as well as transportation under the proposal, Bloomberg News reported.

Both sides are still grappling with how to keep the border between Ireland and Northern Ireland open, the news service said. A compromise could be made involving border checks at the U.K. mainland, according to the report.

Michel Barnier, the EU's chief negotiator, will discuss the proposal with EU ambassadors on Oct. 10.

European Council President Donald Tusk said Oct. 4 that the EU is still offering the U.K. a deal that goes beyond what the bloc has with Canada.

"Much further-reaching on trade, on internal security and on foreign policy cooperation," Tusk said. "This is a true measure of respect. And this offer remains in place."