As Britain’s transition period out of the European Union fast approaches, Prime Minister Boris Johnson has signaled that, if it comes down to it, the country can live without a new trade deal.
In a phone call on Saturday, the Prime Minister and the head of the EU’s executive, Ursula von der Leyen agreed to intensify talks on a post-Brexit deal. The transition period is set to end on December 31.
In an interview Sunday during the second day of the Tory Conference, with Andrew Mar on the BBC Johnson emphasized that it should be possible to reach a deal. “I think it’s there to be done,” he said.
He did say, however, that he hoped the EU would agree to the Canada-style free trade agreement Britain wants: “I see no reason why we shouldn’t get those sorts of terms.”
But he noted that there were several issues that needed to be cleared up.
“Alas, there are some difficult issues that need to be fixed, and there’s no question that the EU needs to understand that we’re utterly serious about needing to control our own laws and our own regulations, and similarly they need to understand that the repatriation of the UK’s fisheries … is very important,” he said.
Johnson has proposed that the kind of situation that Australia is currently in, where the rules of trade are really bound by the World Trade Organization instead of an actual trade deal, would be fine. In fact, Australia is in a no-deal situation, when it comes to the EU.
When he was asked if he was concerned about having to contend with a no-deal situation during this pandemic, Johnson said: “I don’t want the Australian WTO-type outcome, particularly, but we can more than live with it.
“I think the people of this country have had enough … of being told that this will be impossible or intolerable. I think we can prosper mightily under those circumstances.”
In fact, Australia is less than pleased with its current situation, where it does US$61 billion worth of trade with the EU. Because it has no trade deal with the EU, Australia has to rely on WTO terms which come with a number of restrictions.
It has been working on a free trade deal with the EU since at least 2018.
Last week the government said importers and exporters will need to complete extra paperwork whether or not there was a deal, or face the consequences of massive 100 km queues of trucks.
Meanwhile, the timeline is even tighter than the end of the year, as the EU says any deal must be decided by Halloween, or in the first days of November at the latest, so that there will be enough time for the bloc to ratify it before New Years.
More than US$1 trillion could be at stake if a deal is not reached.