Prime Minister Boris Johnson on Saturday reiterated that the U.K. was ready to walk away without a trade deal with the European Union if no agreement could be reached.
In a call with his Polish counterpart, Johnson told Mateusz Morawiecki that while he welcomed the agreement by both the U.K. and the EU to intensify negotiations next month, the U.K. was ready to leave on “Australia terms” if an agreement wasn’t reached, according to a statement from the Prime Ministers’ Office. Australia has no formal trade deal with the EU.
The U.K. and the EU have been negotiating over the terms of a separation agreement for months and prospects for a deal aren’t clear. Without a trade accord, Britain and the EU would default to trading on World Trade Organization terms from Jan. 1, 2021, meaning steep tariffs and an economic shock. Johnson has repeatedly said that the country would not seek an extension to the transition agreement that is due to end next year.
On Saturday, German Chancellor Angela Merkel warned that the U.K. would have to live with the consequences of failing to reach a deal, including “a less intertwined economy,” according to an interview with Sueddeutsche Zeitung. Merkel suggested that Johnson might not be interested in reaching an agreement with the EU.
A key sticking point in the talks has been the EU’s demand that the U.K. commits to tracking the bloc’s rules in areas such as environmental and labor protections and state aid, for fear that Britain would become a competitor on its doorstep. The British government sees the request as inconsistent with the principle of sovereignty that it argues was at the core of the vote for Brexit.
The U.K.’s chief Brexit negotiator on Thursday rejected a potential compromise in the trade talks, saying Britain isn’t prepared to accept tariffs if the country makes laws in its own interests.
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