With the post Brexit adjustment period coming to an end on December 31 this year, British PM Boris Johnson has issued a statement asking his countrymen to prepare for a no deal exit. This warning comes as Johnson has continuously vouched for a no post-Brexit free trade agreement (FTA) with the European Union (EU).
“We always knew that there would be change on January 1, whatever type of relationship we had. And so now is the time for our businesses to get ready, and for hauliers to get ready, and for travellers to get ready,” said the PM.
“So with high hearts and complete confidence we will prepare to embrace the alternative. And we will prosper mightily as an independent free trading nation, controlling our own borders, our fisheries, and setting our own laws,” Johnson said in a statement from Downing Street.
The British Prime Minister called this his judgment call on the UK-EU trade negotiations as European Council summit this week failed to come up with promising answers.
The UK had voted to leave the 27-member European economic trading bloc in a referendum in June 2016 and formally left in January this year, entering into a transition period with unchanged rules until the end of this year.
Both sides have been holding talks to thrash out an FTA akin to the EU’s trade ties with Canada. However, Johnson’s dramatic announcement on Friday notes that the likely outcome is now a relationship similar to EU-Australia ties, based on global trading norms.
“From the outset we were totally clear that we wanted nothing more complicated than a Canada-style relationship, based on friendship and free trade. To judge by the latest EU summit in Brussels that won’t work for our EU partners. “They want the continued ability to control our legislative freedom, our fisheries, in a way that is obviously unacceptable to an independent country,” said the UK PM, referring to one of the key stumbling blocks to a new deal being the division of waters for fishing rights with neighbouring coastal EU countries.
Instead, he indicated the prospect of smaller, sector-specific agreements remains on the table.
“And of course we are willing to discuss the practicalities with our friends where a lot of progress has already been made, by the way, on such issues as social security, and aviation, nuclear cooperation and so on. But for whatever reason it is clear from the summit that after 45 years of membership they are not willing – unless there is some fundamental change of approach – to offer this country the same terms as Canada,” he said.
In a harsh rebuke of the EU, he added: “And given that they have refused to negotiate seriously for much of the last few months, and given that this summit appears explicitly to rule out a Canada-style deal, I have concluded that we should get ready for January 1 with arrangements that are more like Australia’s based on simple principles of global free trade.” Ursula von der Leyen, the President of the EU Commission, said she would continue to work for a deal – “but not at any price”.
“As planned, our negotiation team will go to London next week to intensify these negotiations,” she said.
Both sides have been calling on each other to compromise on key issues, including fishing and limits on government subsidies to businesses. In a document issued during the summit in Brussels this week, the EU said progress in key areas was currently “not sufficient” to reach a deal and asked EU’s Chief Brexit Negotiator, Michel Barnier, to “continue negotiations in the coming weeks”.
Johnson had set a mid-October deadline for a breakthrough in the talks and his intervention is seen as part of the pressure tactics.
Businesses on both sides have been warning against a no-deal Brexit, which would severely impact their ability to continue to function in a smooth manner after 45 years of close UK-EU alignment.
Unless there is a last-minute deal, the UK will trade with the EU according to the default rules set by the World Trade Organisation (WTO) from January 1 next year.