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Tough talking begins

Johnson tells Barnier ‘we did not sign up to EU trade rules’

Boris Johnson in Greenwich

Britain was set on a new collision course with the EU today after Prime Minister Boris Johnson and the bloc’s chief negotiator Michel Barnier clashed over tariffs.

Mr Johnson insisted he not sign up to the bloc’s rules while Mr Barnier warned of tariffs and quotas unless he did.

The PM called for a Canada-style free trade deal, saying the UK would return to the Withdrawal Agreement if such a deal was not reached.

Canada’s deal with the EU removes tariffs on the majority of goods traded between the countries and public contracts are opened up to each other’s contractors. Products must comply with each other’s standards.

Crucially, the services sector – which makes up about 80% of the UK economy – is only partially covered by the deal and it does not cover financial services.

Speaking in Greenwich today following the UK’s exit from the EU on Friday night, Mr Johnson said: “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.”

Delivering a speech entitled “Unleashing Britain’s potential”, he said the choice for Britain was a Canada-style deal or a much more distant deal like Australia.

“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 said.

“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. In either case, I have no doubt that Britain will prosper mightily.”

European Union leaders want a trade deal based on zero-tariffs and zero-quotas but this will be conditional on open and fair competition between the UK. EU leaders say the further Britain diverges from their rules the less access it will have to the EU market.

Mr Barnier said the EU would insist on a level playing field with reciprocal access to fishing waters.

He added: “We’ll continue to prepare for a situation where no deal is being arrived at. We certainly don’t want that to happen. We’ll work to avoid that, but if we can’t manage a deal by the end of the year there will be a cliff-edge on many fronts.”

Sterling fell 1.5% against the dollar following Mr Johnson’s speech as a hard Brexit became a potential outcome.

John Allan, the president of the CBI, broadly supported Mr Johnson’s position. He said: “Business optimism is returning. The right signals about the UK’s future relationship with the EU will turn confidence into investment.

“The Prime Minister’s clear, vocal commitment to global free trade and maintaining high standards through a thriving relationship with the EU will help.

“The challenge is to ensure business confidence is not caught in the crossfire of a tough, public negotiation. Talk of a bare-bones deal could pause investment.

“As the negotiations progress, firms ask the government to take every opportunity to show ambition, building a deal with deep mutual market access while keeping business insight at the heart of their decisions.”

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