British Prime Minister Boris Johnson warns that there is a “high probability” that negotiations between the UK and the European Union on a trade deal will fail. Companies in the UK would therefore be well prepared for such a no-deal scenario, he told UK media.
The transition phase after Brexit ends on January 1st, during which the British are still largely bound by agreements of the European Union. If the EU and the UK do not have a trade agreement before that date, reciprocal trade will fall back on the very unfavorable rules of the World Trade Organization (WTO).
“I think we have to be very, very clear that there is a high likelihood that we will find a similar solution to what we did between Australia and the EU,” said Johnson. The Conservative Prime Minister is more likely to be referring to an “Australian model” when referring to a no-deal Brexit as Australia has no trade deal with the EU.
The European Union and the UK have agreed to continue negotiations until Sunday before a “firm” decision is made on the importance of further talks. The main stumbling blocks are fishing, agreements on fair competition between UK and EU companies and how to enforce those agreements.
Johnson was particularly critical of the European position on the last two points. If London approves Brussels’ demands, he fears that the UK will continue to be forced to obey European Union laws. His political promise was precisely that the UK would be able to operate completely autonomously from Brussels after Brexit.