‘We have capacity for No Deal’ - EU hits back at Boris Johnson’s threat to abandon Brexit trade negotiations

The British government stated it would walk away from trade talks with the EU if there was no sufficient progress by June 2020.

The government’s guidelines for negotiations were published on Thursday with the first round of talks due to take place at the beginning of next week.

“There is a mid year rendezvous to assess the negotiations,” said the European Commission shortly after the publication of the UK’s trade deal negotiation guidelines.

“Re No Deal preparedness, the Commission has been thoroughly preparing for a No Deal Brexit, the situation has changed because we have a deal-based Brexit.

“[It’s] premature to speculate about the result of those negotiations, we’re only starting on Monday.

“The Commissionn has the capacity for a No Deal outcome at the end of the Free Trade Agreement (FTA) negotiations,” the Commission declared.

The UK guidelines clearly spell out how the government is prepared to rely upon World Trade Organisation (WTO) regulations to continue trading with the EU should negotiations fail to make sufficient progess towards securing a FTA.

The possibility of the UK having to rely on WTO terms in order to continue trading could spell trouble for many businesses.

The transition period designed to allow the UK to gradually withdraw from the EU ends on December 31, 2020.

The UK will be completely out of the EU’s single market and customs union on January 1, 2021 therefore if there is no trade deal in place it could result in a vulnerable economy with virtually no stability.

The government states in the guidelines that it believes a “broad outline of an agreement” can be reached by the June deadline and in turn could be “rapidly finalised” by September 2020.

“If that does not seem to be the case at the June meeting, the Government will need to decide whether the UK’s attention should move away from negotiations and focus solely on continuing domestic preparations to exit the transition period in an orderly fashion,” the guidelines state.

Senior Cabinet minister Michael Gove told the House of Commons the government would refuse to include EU regulations in any FTA.

“The UK Government seeks a FTA with robust protections for the environment and labour standards.

“But we do not see why the test of suitability in these areas should be adherence to EU law and submission to EU models of governance.

“The EU does not apply those principles to FTAs with other sovereign nations and they should not apply to a sovereign UK.”