British Prime Minister has asked U.K. citizens to prepare for a no-deal Brexit unless the European Union decides to make a fundamental change in its approach to trade and security negotiations which are currently at an impasse.
- In a televised statement on Friday, Johnson said that it was clear from his summit with EU leaders that unless there is “some fundamental change of approach”, they will not give the UK what it wants, adding that the EU wants to control the UK in a way that is unacceptable.
- Since there are only 10 weeks left until the 12-month transition period ends, the U.K. Prime Minister said that he had to make a judgment about the likely outcome and to prepare the country.
- Despite his self-imposed deadline for a deal having passed on Thursday, Johnson did not indicate that he is walking away from discussions.
- The pound was down 0.1% against the dollar, to $1.28 after Johnson’s address.
Johnson touted that the U.K. will still prosper without a deal stating, “with high hearts and with 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.”
The European Commission President, Ursula von der Leyen responded to Johnson’s statement with a tweet stating that the EU is continuing to work for a deal, “but not at any price.” The EU’s negotiation team will go to London next week to “intensify these negotiations,” she added.
The U.K. and Johnson are seeking a so-called ‘Canada-style’ deal, a reference to the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU. The free trade agreement between Canada and the regional bloc which gets rid of most tariffs on traded goods was signed back in 2009. In his statement, Johnson lamented that the EU was not prepared to give it a similar deal noting that it seemed “curious that after 45 years of our membership they can offer Canada terms they won’t offer us.” EU officials have argued that Britain, which is the world’s 6th largest economy and next door to Europe, poses a much bigger competitive challenge than distant Canada and therefore cannot be offered such a deal. Johnson said that he now expects an ‘Australia-style’ deal which means that the U.K will have to trade on the World Trade Organization terms, which would include tariffs on trade.
WHAT TO WATCH FOR
Johnson’s latest comments will likely face backlash from business and industry leaders, who have for months warned that they are not prepared for the U.K. leaving the EU without a trade deal.