Boris Johnson says it is “very likely” that the UK has failed to make a post-Brexit agreement with the EU.
Speaking for the first time since a major conference in Brussels, the Prime Minister said “now is the time” for firms and individuals to prepare for a non-negotiable outcome.
Negotiations are ongoing between the two sides but Mr Johnson said they were “not at all” in reaching an agreement.
Time is running out to reach an agreement before the UK stops following EU trade rules on 31 December.
Weeks of intensive negotiations between officials have failed to overcome obstacles in key areas, including competition rules and fishing rights.
Mr Johnson met with European Commission President Ursula von der Leyen on Wednesday, but the two failed to intervene.
Mr Johnson has promised the British negotiators, who have previously held talks with their EU counterparts in Brussels, “will do more” to reach an agreement.
But he said the EU wanted to keep the UK “locked” in its legal system, or face imports such as import duties, “which made things even more difficult”.
The Prime Minister added that EU proposals would mean that, although he left the party earlier this year, the UK would be forced to remain “twin” of the 27-nation organization.
“At the moment, I have to tell you frankly, the agreement is not yet in place and that was the strong opinion of our cabinet,” he said.
Mr Johnson said “looking at where we are,” it is important for the UK to prepare for the “Australian-style option” of not having a free trade agreement with the EU.
“There is a greater chance that we will have a much better solution as Australian relations with the EU than Canadian relations with the EU,” he said.
Mr Johnson stressed that the country would “improve” on these terms, but former Australian Prime Minister Malcolm said the UK must “be aware of what it wants”.
Mr Turnbull told the BBC’s Question Time that there were “major barriers to Australian and European trade”, adding: “Australians will not consider our trade relations with Europe to be satisfactory.”
Is It A ‘No-Deal’ Scenario?
There will be no agreement? Right now it is very difficult to say.
But is Boris Johnson only trying to send messages to his conflicting numbers? The answer is no.
On Wednesday we saw the whole deal approaching what the two sides would see as a failure – a failure to agree on a trade agreement that had been reached and held by both parties.
It is possible that a senior official or EU leadership has changed his mind.
Of course, the debate does not tell us everything.
But the Prime Minister’s warning tonight is not just a message for EU leaders – whatever the merits of the decision, Downing Street is preparing for the option of leaving the status quo without the proper arrangements in place.
Australia is negotiating a free trade agreement with the EU but currently does not have one.
It mainly does business with the EU under the rules of the World Trade Organization (WTO), but has a few provisions in place, such as science and wine trade.
A move to WTO rules by 31 December could lead to tax cuts that lead to higher prices for UK goods to buy and sell from the EU, among other changes.
Canada has concluded an agreement with the EU in 2017.
Strides For Progress
Mr Johnson said he had “tried hard to make progress” in his meal with Ms von der Leyen, but the EU was making things “unnecessarily difficult”.
In the meantime, the EU has set anticipated measures to be taken in the event of a trade agreement with the UK not being reached.
The plans are aimed at ensuring that UK-EU and air-to-air communications remain operational after the end of the post-Brexit transition period on 31 December.
They also allow for the availability of fishing in each other’s water for up to a year, or until an agreement is reached.
Brexit – Foundations
Brexit has happened but the rules have not changed at once: the UK has left the European Union on 31 January 2020, but leaders need time to negotiate a health deal thereafter – they have 11 months.
Negotiations are happening: The UK and the EU until 31 December 2020 have agreed to trade and other things, such as fishing rights.
In the absence of an agreement: Border checks and customs duties will be submitted between the UK and the EU. But with the agreement or not, we will still see changes.
Balance Of Fairness
EU leaders met in the Belgian capital for a two-day conference of their own, although Brexit will not focus much on it.
The speaker said they discussed the situation on Friday morning, but it lasted ten minutes.
Arriving at the conference, Ms von der Leyen said the terms of the trade agreement should be “appropriate for our employees and our companies.”
“These estimates are not yet in place,” he said, adding that a decision would be made on Sunday.
BBC Europe correspondent Kevin Connolly said EU leaders were busy debating their budget, maritime index and Turkey in the Mediterranean and the coronavirus as they spoke early Friday morning.
“Brexit has not been the only priority here – perhaps even a major one,” he said.
Ahead of the Prime Minister’s remarks, Labor leader Sir Keir Starmer urged Mr Johnson to “continue and pass” the agreement, adding the remaining “issues that can be resolved”.
Asked if his party would support the agreement by voting for Commons, he said: “We will look into it – and we will take national action.”
“But if you choose the right thing between a transaction or a transaction, then the agreement is clearly in the best interests of the whole country,” he added.