(CN) — British Prime Minister Boris Johnson on Thursday warned Brits to prepare for the “strong possibility” that the United Kingdom will leave the European Union without a trade deal at the end of the year, an outcome likely to cause major disruptions and chaos.
Johnson made his statements a day after he held largely fruitless talks over dinner with European Commission President Ursula von der Leyen to find room for compromise in negotiations over a contentious trade agreement.
After the last-ditch dinner in Brussels, Johnson and von der Leyen said the differences between the two sides remained too great to bridge. The U.K. is seeking access to the EU’s vast single market without also being tethered to its rules and laws, something EU leaders are refusing to allow out of concern that the U.K. would gain an unfair advantage and end up benefiting from its decision to leave the bloc. For instance, if the U.K. is not tied to EU rules it could lower environmental and labor standards and sell goods and services at lower prices than its EU competitors that are playing by more stringent rules.
On the flip side, if the U.K. agrees to abide by EU rules and laws then the entire endeavor to break away from the EU is undermined.
“I do think we need to be very, very clear there’s a strong possibility, strong possibility, that 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 video statement. “That doesn’t mean that’s a bad thing.”
Australia does not have a trade deal with the EU, unlike Canada, and Johnson has taken to describing a no-deal Brexit euphemistically as the “Australian solution.”
But economists warn that leaving the EU without a deal will have disastrous consequences and cause political and social frictions. An 11-month transition period ends on Dec. 31 and with the start of the New Year the U.K. will officially be outside of the EU.
Earlier on Thursday, the EU issued its own plans to prepare for the possibility that border controls, tariffs and other barriers will need to be erected in the event that the two sides fail to reach a deal. Those emergency plans involve making sure airplanes and trucks can continue going between the continent and the U.K. Already, there’s a chance that a no-deal Brexit will leave Brits barred from traveling to the EU due to the high rates of coronavirus infections in the U.K., the worst-hit European nation in the pandemic.
After Wednesday’s dinner talks, both sides agreed to continue negotiating until Sunday in a desperate bid to see if one side or both may be willing to budge. Both sides see a trade deal as crucially important but the divisions have grown so great that neither side appears willing to compromise on key aspects.
In 2016, a majority of Brits voted to leave the EU and they saw throwing off EU laws and rules as a principal reason for their Brexit vote, along with a desire to limit immigration from EU and non-EU nationals.
The Brexit referendum was a shock to the EU and ushered in the specter that other EU nations might follow suit and leave the bloc. Both to punish the U.K. and ensure its own survival, EU leaders have proven to be unwilling to make many compromises. As the bigger power, the EU has largely had the upper hand in the negotiations. The relationship between the British political class and their counterparts on the continent have long been contentious. Over the course of its membership in the EU, the U.K. was able to extract many concessions and exceptions.
At a meeting of European leaders in Brussels on Thursday, von der Leyen said the EU was unwilling to allow the U.K. unfair access to its single market.
“It was a good conversation but it is difficult,” she said about the dinner with Johnson. “We are willing to grant access to the single market to our British friends – it’s the largest single market in the world – but the conditions have to be fair, they have to be fair for our workers and for our companies and this fine balance of fairness has not been achieved so far.”
For his part, Johnson’s message was simple: Life for Brits is likely to be very different on Jan. 1.
“Now is the time for the public and for businesses to get ready for Jan. 1, because, believe me, there’s going to be change either way,” he said. “We certainly now need to make proper preparations for that Australian solution.”
Courthouse News reporter Cain Burdeau is based in the European Union.