The European commission produced its much-anticipated draft withdrawal agreement on Wednesday. The reaction was swift, and polarised. Commentator Ian Dunt said it represented the government’s “chickens coming home to roost”. Arlene Foster, Democratic Unionist party leader, for her part, called the document “constitutionally unacceptable”, adding that the terms laid down would be economically catastrophic. “No UK prime minister could ever agree to it,” was the acerbic rejoinder from Theresa May herself.

Let’s be clear what this draft is and what it isn’t. It is the commission’s idea of what a withdrawal agreement should look like. It has not, as yet, been signed off by the member states, and as such has no formal status in the negotiations. Even if it was to be signed off, it would still represent merely the position of one side in the talks.

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The document does, however, contain some incendiary stuff. The commission has insisted that citizens with “settled status” should be entitled to bring over non-EU partners they meet after the exit date, while stating that British citizens in other member states will only be able to enjoy their EU rights in their current countries of residence. On transition, it resuscitates the idea of suspending the benefits of the single market for the UK in the event that it does not fulfil its obligations.

And then, of course, there is Northern Ireland. Here the commission is adamant that the only way to avoid a hard border between north and south is for Northern Ireland to remain party to the EU customs code and maintain full alignment in key areas of public policy such as livestock and agriculture.

Leaving aside the fact that this seems like precisely the kind of cherrypicking the EU has long insisted is impossible, there are real issues to be resolved. However, it is worth stepping back and putting things in perspective. The draft is a gambit in a negotiation that has barely started. The EU, for its part, wants to have the Northern Ireland situation subject to an “operational solution” before we move on to negotiating trade. A comprehensive withdrawal agreement must be signed in October and ratified by the end of March 2019.

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There are good reasons for this. One is, of course, that the Republic of Ireland is a member state and the EU protects its member states. Another is related to the trade negotiations themselves. For these, the commission has adopted a highly restrictive position. The UK has two choices, it argues: either it can sign up to membership of the single market with no say over its rules – the Norway option – or it can have a more run-of-the-mill deal that will impose significant restrictions on trade – the Canada option.

In order to square this with its desire to avoid a border in Ireland, the draft agreement insists that the UK should accept the fact that, in the absence of any other solution, Northern Ireland will be “considered to be part of the customs territory of the European Union”.

The UK position is totally different. The government cannot countenance anything that would mean Northern Ireland and the rest of the UK would have different relationships with the EU, since this would effectively mean a border in the Irish Sea.

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That substantive problem aside, May has a tactical incentive not to sign up to the commission’s scheme. If the Irish border issue were not resolved by the time trade talks were due to begin, the EU would come under enormous pressure to modify its stance. David Lidington made this clear in parliament on Tuesday when he said that we are at the start of a negotiation. The commission thinks we are at the end of one.

What we have here is a high-stakes game of chicken. Brussels wants to present London with a take-it-or-leave-it agreement. Rejection would raise the spectre of disorderly exit, which, while it would certainly damage member states, would hurt the UK far more. London wants to brazen this assault out, in the hope that ultimately the EU, including the Irish, will balk at the prospect of no deal (which would make a hard border in Ireland inevitable) and grudgingly agree to sort out the border at the same time as trade.

Can the prime minister weather the storm? Jeremy Corbyn’s speech on Monday pledging a customs union, and the insistence of Cardiff and Edinburgh that they will withhold legislative consent for the withdrawal bill, add to the pressure. May’s only means of survival may be to play the long game. It remains to be seen if she has the political strength to do so.

• Anand Menon is director of the UK in a Changing Europe initiative, and a professor at King’s College London