The EU has called on the UK to “make up its mind” on the kind of post-Brexit deal it wants.
European Commission president Ursula von der Leyen acknowledged there were “differences in the approach” between the two sides following the first round of negotiations last week.
Britain has set out its aim for a free trade agreement along the lines of the one the EU has with Canada.
But Brussels has called for a closer relationship including a “level playing field” for areas including workers’ rights, environmental protections and state subsidies to ensure fair competition between the neighbouring economies.
Ms Von der Leyen said “we know what each side is standing for” before claiming that the UK needed to think about the economic trade-offs it was willing to accept, if it breaks away from EU rules.
Her comments are likely to frustrate the UK side, which believes it has been clear about the more limited arrangement it is seeking from the EU in the negotiations.
Boris Johnson’s blueprint for the negotiations indicates the UK could walk away unless the “broad outline” of a deal is clear by the end of June.
Asked whether there would be a “landing zone” for a deal in June, the commission president told reporters in Brussels: “I think now we both have presented our negotiation mandates, you know that we want to be very ambitious, we want to have a very good relationship with our British friends.
“We are aware that there are differences in the approach towards what scope should the future agreement have and what are – if I may say so – the rules of the game everybody has to abide to.
“So it will be important that the UK makes up its mind – the closer they want to have access to the single market, the more they have to play by the rules that are the rules of the single market.
“If this is not the UK’s choice then of course they will be more distant and it will be more difficult for the UK to access the single market.
“So I think it’s up to the UK within the negotiations to think about the trade-offs they want to take into account.”
After the first round of talks in Brussels last week, the Prime Minister’s Europe adviser David Frost said the two sides “now understand each other well”.
Michel Barnier, the EU’s lead negotiator, said the talks had been “constructive” but there were “very serious divergences” between the sides.
The next round of talks is scheduled to start on March 18.