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News | Published February 03 2020

Johnson outlines his Brexit plan

Speaking in Greenwich today, Boris Johnson called for the EU to agree to a Canada-style free trade deal, saying the UK would leave on WTO terms if this could not be agreed.

Under the deal between Canada and the EU, the majority of import tariffs have been eliminated but goods are still checked for customs and VAT payments. 

Goods must also conform to EU standards. Banking, however, is not covered by the agreement and services, which constitute 80 per cent of the UK economy, are only partially covered.

Outlining his desire to secure such an agreement with the EU, Johnson said: “We have often been told that we must choose between full access to the EU market, along with accepting its rules and courts on the Norway model, or an ambitious free trade agreement, which opens up markets and avoids the full panoply of EU regulation, on the example of Canada.

“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.”

The latter part of Johnson’s statement, addressing what would happen if a free trade deal could not be reached, provoked fears that the UK may still leave the European Union with effectively no deal.

Seeking to assuage these fears, Johnson asserted that “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.”

The EU’s deal with Australia is far less encompassing. 

Currently, they operate on a limited “partnership framework” which was agreed in 2008. This covers co-operation in a variety of economic areas, most notably in the trade of industrial products, and a mutual recognition of product standards. 

Most of the trade between Australia and the EU, however, is conducted on WTO terms and the two parties have been trying to negotiate a free trade deal since 2018.

The pound fell after this announcement was made, dropping 1.1 per cent on the dollar and 0.9 per cent on the euro.

A key reason for Johnson’s pursuit of a Canada style agreement is the ability to diverge on regulations, something he has repeatedly pledged the UK will do. In his speech, Johnson rejected the need for the UK to adopt rules on “competition policy, subsidies, social protection, the environment or anything similar.”

This assertion, however, was rebuffed by Michel Barnier, the EU’s chief negotiator. 

Speaking in Brussels, Mr Barnier said that the EU was ready to offer a “highly ambitious trade deal as the central pillar of this partnership” but this would require the UK to agree to “specific and effective guarantees to ensure a level playing field.”

The UK and the EU have until the end of 2020 to reach an agreement, although the deal itself is likely to be broken up into sector-specific trade agreements. 


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Authored by

George Salmon
Political Editor
@theparlreview
February 03 2020

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