UPDATE 1-EU to Britain: come back Friday with reworked backstop - diplomats

EU Brexit negotiators have rejected Britain's latest proposals on the so-called Irish backstop and told the UK's top lawyer to come back on Friday with a reworked version, according to EU diplomats.

They said Attorney General Geoffrey Cox had proposed an arbitration panel to resolve UK-EU disputes which would not be obliged to refer cases to the EU's top court, the ECJ, whose jurisdiction Britain wants to leave. Cox has been tasked by British Prime Minister Theresa May with securing concessions from the European Union on proposals designed to ensure no hard border on the island of Ireland, a key demand of pro-Brexit lawmakers in the UK parliament.

However, EU negotiators said the Cox proposal would unpick the Withdrawal Agreement reached by the EU and UK after months of tortuous negotiations. Britain's parliament rejected that pact, largely over concerns that Britain could be locked in a continued customs union with the EU. The bloc has offered to work on addendums to the text to make it more palatable but refuses to change its substance.

EU diplomats said the Cox proposal provided for an arbitration panel that would decide if enough "good faith" was being shown in negotiating a new deal for post-Brexit trade to obviate the need for customs checks on the Irish border. The panel could rule positive even in the absence of a final trade agreement. The EU and the UK would then have to go into a "mini-backstop", which would include fewer checks than the one envisaged in the Withdrawal Agreement. (Reporting by Gabriela Baczynska, Alastair Macdonald, Jan Strupczewski, Editing by Jon Boyle)

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