(CN) — The risk of a previously unthinkable disruptive and chaotic no-deal divorce between the United Kingdom and the European Union is becoming ever more likely after European and British leaders said trade talks are making no progress.
On Friday, British Prime Minister Boris Johnson, an architect of Brexit and ardent anti-EU politician, said the U.K. needs to prepare to leave the EU at the end of the year without a deal. On Jan. 1, a transition period ends and the U.K. formally exits from the EU.
To ease the U.K.’s departure and limit economic damage, the two sides have been negotiating for months on a trade deal but those talks have stalled. Without a deal, the U.K. and EU would trade on World Trade Organization terms. In other words, they'd treat each other as though they were on opposite sides of the planet. Indeed, on Friday Johnson said the U.K. needs to prepare for the “Australia solution.” The EU and Australia have no free trade agreement.
Johnson's statement came after European leaders meeting in Brussels said on Thursday that a deal remained out of reach due to a lack of progress.
“They want the continued ability to control our legislative freedom, our fisheries, in a way that it is completely unacceptable to an independent country,” Johnson said in a televised statement telling Brits to prepare for a no-deal Brexit.
The consequences of a no-deal Brexit are far reaching with goods, people and services going between the U.K. and EU facing restrictions such as tariffs, lengthy border controls, bans and heightened scrutiny. A no-deal scenario is expected to cause massive economic pain, especially for the U.K. because it relies heavily on the EU market. But Johnson and many of his fellow Conservative Party members insist the U.K. can do better outside the EU by entering new trade agreements around the world. For example, the U.K. is aiming to sign a major deal with the United States.
Both sides have blamed each other for not budging on a series of thorny and complicated issues ranging over fishing rights, environmental and labor standards, the status of Northern Ireland and rules over government aid to domestic corporations.
The EU has sought to ensure the U.K. abides by many of the EU's rules and standards before it is allowed access to the EU market. European leaders want to make sure the U.K. doesn't get a leg up on EU competitors by leaving the bloc and not having to follow the same rules. For its part, the U.K. doesn't want to be bound by EU rules, in no small measure because it thinks doing so would hinder its ability to strike new trade deals around the world. British negotiators have sought to reach piecemeal deals with the EU instead of signing up to a comprehensive deal.
For Britain to leave without a trade deal was considered unthinkable by most politicians and experts on both sides of the English Channel until Johnson became prime minister during a chaotic House of Commons fight over the terms of Brexit in late 2019.
Since taking over No. 10 Downing Street, Johnson has pushed the U.K. out of the EU and alarmed many in Britain and the EU by saying the U.K. would leave the EU with or without a deal.
Many thought his rhetoric about leaving without a deal was simply a ploy to gain leverage in negotiations and that he would not carry out his bold – many say reckless – no-deal Brexit strategy. Increasingly, though, it appears Johnson is ready to turn his back on the EU.
“Given that they have refused to negotiate seriously for much of the last few months,” Johnson said, “I've concluded that we should get ready for January the first for arrangements that are more like Australia's based on simple principles of global free trade.”
Earlier this year, Johnson set this week as a deadline for deciding whether to walk away from negotiations unless progress had been made. On Friday, despite little signs of progress, he left the door open a crack for a deal to be struck.
“As far as I can see they've abandoned the idea of a free-trade deal, there doesn't seem to be any progress coming from Brussels,” he said. “So what we're saying to them is, ‘Only come here, come to us, if there's some fundamental change of approach' …. Unless there's a fundamental change of approach, we're going to go for the Australia solution. And we should do it with great confidence.”
In its policy position Thursday, EU leaders called on the British government to budge and “make the necessary moves to make an agreement possible.” They also urged everyone in the EU to prepare “for all outcomes, including that of no agreement.”
The EU said its chief negotiator, Michel Barnier, will continue talks, scheduled for Monday. In a news briefing after Johnson spoke, Downing Street told reporters that Barnier should show up in London only if he is willing to compromise.
“There’s no point in trade talks if the EU doesn’t change its position,” a Downing Street spokesman said, according to The Guardian newspaper. “The EU effectively ended the trade talks yesterday.”
The talks have become even more bitter after Johnson's government introduced legislation to override a deal the EU and the U.K. signed stipulating that Northern Ireland would remain aligned with EU rules and standards even after the U.K.'s departure from the EU. This arrangement was designed to keep the border between Ireland, an EU member, and Northern Ireland open and free of border checks. There are fears that a return to a so-called hard border in Ireland could reignite sectarian rivalries in a region still recovering from a decades-long conflict, the Troubles.
On Friday, European leaders said they still wanted a deal but not at any cost. The Brexit referendum in 2016 was a shock to European capitals and called into question the solidity of the bloc, the world’s largest single economic market. Fearing other member states could follow the U.K.’s exit, EU leaders have held a tough line against the U.K.
“I still think it is better to get a deal but not at any price,” German Chancellor Angela Merkel told reporters in Brussels.
French President Emmanuel Macron said a deal is meant to establish the future relationship between the EU and the U.K. He said the U.K. needs a deal more than the EU.
“Despite what was said to them in the Brexit referendum, the Britons need our single market,” Macron told reporters. “It’s the United Kingdom that wanted to leave the European Union and is leaving the European Union and needs an agreement much more than we do.”
Courthouse News reporter Cain Burdeau is based in the European Union.
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