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#Brexit - UK open to looser 'Australia-style' trade deal with EU: source

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British Prime Minister Boris Johnson would consider a looser trade agreement with the European Union, similar to the bloc’s ties with Australia, rather than follow EU rules to reach a closer deal, a government source said on Saturday, writes Elizabeth Piper.

“There are only two likely outcomes in negotiation - a free trade deal like Canada or a looser arrangement like Australia - and we are happy to pursue both,” the source said.

Johnson is due to give a major speech on trade on Monday, following Britain’s departure from the EU on Friday after nearly 50 years of membership.

Previously Johnson has said his main goal is to reach a Canada-style trade deal with the EU before an 11-month transition period expires at the end of the year, after which British firms would face tariffs to sell goods to the EU.

But Johnson has also said Britain will not commit to continue following EU rules after the transition period, and Saturday’s remarks suggest he is growing less willing to make the trade-offs that many businesses want to smooth a deal.

Canada does not follow EU rules, but some EU governments are reluctant to give Britain similar leeway to diverge on labour and environmental standards, given the much greater trade volumes involved.

In some areas, such as the minimum wage, maternity leave and the elimination of single-use plastics, British standards significantly exceed EU minimums.

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We’re disappointed by EU but a deal can be done, says Raab

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Britain is disappointed by the European Union’s demand that London give more concessions to secure a trade deal but a deal is close and can be done, British Foreign Secretary Dominic Raab said on Friday (16 October), write Guy Faulconbridge and Paul Sandle.

“We are disappointed and surprised by the outcome of the European Council,” Raab told Sky News.

“We’ve been told that it must be the UK that makes all of the compromises in the days ahead, that can’t be right in a negotiation, so we’re surprised by that but the prime minister will be saying more on this later today.”

“Having said that, we are close,” Raab said of a deal. “With goodwill on both sides we can get there.”

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Brexit brinkmanship: Johnson says prepare for no-deal and cancels trade talks

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UK Prime Minister Boris Johnson said on Friday (16 October) it was now time to prepare for a no-trade deal Brexit unless the European Union fundamentally changed course, bluntly telling Brussels that there was no point in continuing the negotiations, write and

A tumultuous “no deal” finale to the United Kingdom’s five-year Brexit crisis would sow chaos through the delicate supply chains that stretch across Britain, the EU and beyond - just as the economic hit from the coronavirus pandemic worsens.

At what was supposed to be the 'Brexit summit' on Thursday (15 October), the EU delivered an ultimatum: it said it was concerned by a lack of progress and called on London to yield on key sticking points or see a rupture of ties with the bloc from Jan. 1.

“I have concluded that we should get ready for 1 January with arrangements that are more like Australia’s based on simple principles of global free trade,” Johnson said.

“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 and setting our own laws,” he added.

EU heads of government, concluding a summit in Brussels on Friday, rushed to say that they wanted a trade deal and that talks would continue, though not at any price.

German Chancellor Angela Merkel, Europe’s most powerful leader, said it would be best to get a deal and that compromises on both sides would be needed. French President Emmanuel Macron said Britain needed a Brexit deal more than the 27-nation EU.

Johnson’s spokesman said talks were now over and there was no point in the EU’s chief negotiator Michel Barnier coming to London next week barring a change in approach.

However, Barnier and his British counterpart David Frost had agreed to speak again early next week, Downing Street said.

The pound oscillated to Brexit news, dropping a cent against the US dollar on Johnson’s remarks but then rising before falling again on his spokesman’s comments.

After demanding that London make further concessions for a deal, EU diplomats and officials cast Johnson’s move as little more than rhetoric, portraying it as a frantic bid to secure concessions before a last-minute deal was done.

Dutch Prime Minister Mark Rutte said he thought Johnson had signalled that London was ready to compromise.

While US investment banks agree that a deal is the most likely ultimate outcome, the consensus was wrong on the 2016 Brexit referendum: when Britons voted by 52-48% to leave, markets tumbled and European leaders were shocked.

Asked if he was walking away from talks, Johnson said: “If there’s a fundamental change of approach, of course we are always willing to listen, but it didn’t seem particularly encouraging from the summit in Brussels.

“Unless there is a fundamental change of approach, we’re going to go for the Australia solution. And we should do it with great confidence,” he said.

A so-called “Australia deal” means that the United Kingdom would trade on World Trade Organization terms: as a country without an EU trade agreement, like Australia, tariffs would be imposed under WTO rules, likely causing significant price rises.

European Commission President Ursula von der Leyen said she was keen for a deal, though Macron was more downbeat.

“The state of our talks is not that we are stumbling over the issue of fishing, which is the British’s tactical argument, but we’re stumbling over everything. Everything,” Macron said.

“The remaining 27 leaders of the EU, who chose to remain in the EU, are not there simply to make the British prime minister happy,” he added.

Merkel called for Britain to compromise. “This of course means that we, too, will need to make compromises,” she said.

Britain formally left the EU on 31 January, but the two sides have been haggling over a deal that would govern trade in everything from car parts to medicines when informal membership known as the transition period ends 31 December.

Johnson had repeatedly asserted that his preference is for a deal but that Britain could make a success of a no-deal scenario, which would throw $900 billion in annual bilateral trade into uncertainty and could snarl the border, turning the southeastern county of Kent into a vast truck park.

The EU’s 27 members, whose combined $18.4 trillion economy dwarfs the United Kingdom’s $3trn economy, says progress had been made over recent months though compromise is needed.

Main sticking points remain fishing and the so-called level playing field - rules aimed at stopping a country gaining a competitive advantage over a trade partner.

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Boris Johnson ready to settle for an Australia-style deal, as talks reach an impasse

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Here is the statement from UK Prime Minister Boris Johnson in full.

"From the outset we were totally clear that we wanted nothing more complicated than a Canada-style relationship based on friendship and free trade. To judge by the latest EU summit in Brussels, that won’t work for our EU partners. They want the continued ability to control our legislative freedom, our fisheries, in a way that is completely unacceptable to an independent country. And since we have only 10 weeks until the end of the transition period on 1 January, I have to make a judgement about the likely outcome and to get us all ready.

"And given that they have refused to negotiate seriously for much of the last few months and given that this summit appears explicitly to rule out a Canada-style deal, I’ve concluded that we should get ready for 1 January with arrangements that are more like Australia’s, based on simple principles of global free trade. And we can do it because we always knew that there would be change on 1 January whatever type of relationship we had. And so now is the time for our businesses to get ready and for our hauliers to get ready, for travellers to get ready.

"And, of course, we’re willing to discuss the practicalities with our friends where a lot of progress has already been made, by the way on such issues as social security and aviation, nuclear cooperation, and so on. But, for whatever reason, it’s clear from the summit that after 45 years of membership, they are not willing, unless there’s some fundamental change of approach, to offer this country, the same terms as Canada.

"And so 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. And in the meantime, the government will, of course, be focusing on tackling COVID and building that better so that 2021 is a year of recovery and renewal."

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