#Brexit - EU sets out red lines as UK's Johnson talks tough on trade deal

European Union Brexit negotiator Michel Barnier (pictured), laying out his mandate for negotiations with the UK following its exit from the EU last week, said there should be a level playing field over the long term on social, state aid and environmental standards.

He told a news briefing that all sides needed to prepare for the prospect of a “cliff edge” no deal at the end of the year.

Barnier was speaking shortly before British Prime Minister Boris Johnson was due to will lay out his negotiating terms for talks with the EU. He is expected to say that Britain will prosper even if he cannot strike his preferred trade deal.

After marking Britain’s departure from the EU at a party in his Downing Street residence on Friday (31 January), Johnson will use a speech to ram home his message that Brexit, for him, means that sovereignty trumps the economy.

The sides have until the end of the year, when a transitional period expires, to try to secure a deal on trade and future relations - something London and Brussels both say they want to do, but on very different terms.

Trade talks will begin in March. After criticising his predecessor Theresa May’s approach in negotiating a divorce deal with the EU, Johnson is striking a much tougher tone, saying Britain will not adhere to the bloc’s rules and regulations.

LOOSER ARRANGEMENT

And he will say that, if the EU fails to grant a trade deal allowing for tariff- and quota-free trade in goods, similar to the terms the bloc now has in place with Canada, Britain will pursue a much looser arrangement, like one Australia has.

“There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar, any more than the EU should be obliged to accept UK rules,” Johnson will say, according to excerpts of his speech distributed by his office.

Promising to maintain “the highest standards”, Johnson will suggest the EU has already offered a free trade deal along the lines of the one it has with Canada, which does not have to follow the bloc’s rules.

“We have made our choice: we want a free trade agreement, similar to Canada’s, but in the very unlikely event that we do not succeed, then our trade will have to be based on our existing Withdrawal Agreement with the EU,” he will tell businesses, think tanks and ambassadors.

“The choice is emphatically not ‘deal or no-deal’. The question is whether we agree a trading relationship with the EU comparable to Canada’s – or more like Australia’s.”

At the moment, much of EU-Australia trade runs along basic World Trade Organization rules, though there are specific agreements for certain goods. Australia is in the process of negotiating a trade deal with the EU, however.

One British source who declined to be named has said UK negotiators are furious because they believe the EU, Britain’s biggest trading partner, is going back on the divorce deal by suggesting that London would have to adhere to the bloc’s rules to secure a free trade agreement.