Michel Barnier gave the UK an idea of what they may lose should they fail to come to an agreement soon. On Wednesday, the EU's chief negotiator laid out a draft for a treaty that could come into place if no solution to the issues surrounding the border between the Republic of Ireland and Northern Ireland is found. "If we wish to make a success of these negotiations [...] we must pick up the pace," said Barnier as he revealed the draft. Theresa May's reaction to this was quick and vocal: "No UK prime minister could ever agree to it."
The issue lies within the implications of a hard border between Northern Ireland and the rest of the UK, which would in essence signify that Northern Ireland remains in the EU. The Times UK analyzed the treaty as a demand to "effectively hand over sovereignty of Northern Ireland to Brussels." The interests here clearly diverge: the EU wants to keep open borders with Northern Ireland, which would necessarily mean a hard border with the UK, while the UK would like to maintain the common market in place with Northern Ireland.
Article 4 of the treaty states that Northern Ireland "shall be considered to be part of the customs territory of the Union," According to May, this treaty would "undermine the U.K. common market and threaten the constitutional integrity of the U.K. by creating a customs and regulatory border down the Irish Sea."
May is expected to lay out a plan to avoid a hard border with Northern Ireland and to outline the future of the relationship of the UK with the EU on Friday. While Barnier denies that this treaty is meant to "shock" the UK into a deal, many guesses could be made as to what strategy lies behind this.
Should you desire to make your own educated guess, consider attending Schranner Negotiation Institute's Qualified Negotiator certification, right at the heart of the action in London, on May 7-8, 2018.