* U.S. Congress official also cautions Johnson on a trade
deal
* British prime minister worried about 'abusive' EU
* EU negotiator Barnier still hopes for a deal - sources
* Societe Generale sees 80% probability of a no deal
(Adds BoE)
By Guy Faulconbridge and Elizabeth Piper
LONDON, Sept 17 (Reuters) - U.S. Democratic presidential
candidate Joe Biden warned the United Kingdom that it must
honour the Northern Irish peace deal as it extracts itself from
the European Union or there would be no separate U.S. trade
deal.
"We can't allow the Good Friday Agreement that brought peace
to Northern Ireland to become a casualty of Brexit," he tweeted.
"Any trade deal between the U.S. and U.K. must be contingent
upon respect for the Agreement and preventing the return of a
hard border. Period."
Johnson insists he is defending not threatening the Good
Friday pact, but is proposing new legislation that would break
parts of the Brexit divorce treaty relating to British-ruled
Northern Ireland that seek to avoid a physical customs border.
The prime minister accuses the EU of trying to divide up the
United Kingdom and putting a revolver on the table in talks to
set rules for an estimated $1 trillion in annual trade.
He says the United Kingdom has to have the ability to break
parts of the 2020 Brexit treaty if it is to uphold London's
commitments under the 1998 pact which ended three decades of
sectarian violence in Northern Ireland between pro-British
Protestant unionists and Irish Catholic nationalists.
The EU says any breach of the Brexit treaty could sink trade
talks, propel the United Kingdom towards a messy exit when it
fully departs at the end of the year, and thus complicate the
border between Northern Ireland and EU-member Ireland.
The EU's Brexit negotiator Michel Barnier told the bloc's 27
national envoys on Wednesday that he was still optimistic, three
diplomatic sources told Reuters.
"Barnier still believes a deal is possible though the next
days are key," said one of the EU sources.
'ABUSIVE' EU?
Johnson told The Sun newspaper that the EU must not be
allowed to abuse Britain and risk four decades of partnership.
He said the United Kingdom must "ring-fence" the Brexit deal
"to put in watertight bulkheads that will stop friends and
partners making abusive or extreme interpretations of the
provisions."
Societe Generale analysts said on Thursday they now see an
80% chance that Britain and the EU will fail to strike a trade
deal before the end of the year. That would create chaos for
business and markets.
The Bank of England, which on Thursday kept interest rates
unchanged, said market contacts had "reported renewed concerns
over recent Brexit developments".
Biden, who has talked about the importance of his Irish
heritage, retweeted a letter from Eliot Engel, chair of the
Foreign Affairs Committee of the U.S. House of Representatives,
to Johnson exhorting him to honour the Good Friday deal.
Engel urged Johnson to "abandon any and all legally
questionable and unfair efforts to flout the Northern Ireland
protocol of the Withdrawal Agreement" so as to preserve peace in
the province and good U.S-British relations.
Engel also said Congress would not support a free trade
agreement between the United States and the United Kingdom if
Britain failed to uphold its commitments with Northern Ireland.
(Reporting by Guy Faulconbridge, Elizbeth Piper, Sarah Young
and Dhara Ranasinghe in London; and Gabriela Baczynska, Jan
Strupczewski, John Chalmers in London;
Editing by Sarah Young, Kate Holton, William Maclean, Andrew
Cawthorne)