BackBoris Johnson says prepare for no EU trade deal after Brexit
Failure to reach an agreement after nine months of negotiations would deliver a major blow to the British economy and disrupt supply chains for businesses in both the UK and the EU
PremiumUK Prime Minister Boris Johnson warned Britain should prepare to leave the European Union’s single market without a trade deal as negotiations with the bloc falter.
Speaking a day after crisis talks with European Commission President Ursula von der Leyen ended without a breakthrough, Johnson said Britain will continue to seek a deal. Yet he warned that the bloc’s demand that the U.K. follow future changes in the EU’s rules is hampering negotiations.
The pound extended its decline following Johnson’s comments but remained within its range from earlier in the day. It was down around 0.9% at $1.3284.
“There’s now the strong possibility we will have a solution that’s much more like an Australian relationship with the EU than a Canadian relationship with the EU," Johnson said in a pooled TV interview Thursday.
He added: “Looking at where we are, I do think it’s vital that everybody now gets ready for that Australian option," which would see the U.K. facing tariffs and falling back on the rules of the World Trade Organization.
He spoke as EU leaders meet in Brussels for a summit, mainly about other issues. They are due to briefly discuss Brexit over dinner on Thursday evening. With Johnson’s words ringing in their ears, their conversation is likely to become more extensive than initially planned.
The EU’s demand “basically means that whatever new laws they brought in, we would have to follow or else face punishment," Johnson said. “Clearly that’s not a sensible way to proceed."
Failure to reach an agreement after nine months of negotiations would deliver a major blow to the British economy and disrupt supply chains for businesses in both the U.K. and the EU.
Consumers would be hit by additional costs and disruption as tariffs and quotas are imposed on trade with the U.K.’s biggest and closest commercial partner.
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