British Prime Minister Boris Johnson has set a five-week deadline on finding a post-Brexit trade deal and has stressed that the UK is willing to walk away from talks insisting that a no-deal would be a “good outcome for the UK”.
Johnson said that he was happy to complete negotiations with the EU without an agreement if the terms of the deal did not suit the UK.
Such a move would mean that the UK would potentially trade with the EU under WTO rules much like Australia.
Johnson stressed that any deal that could be found had to be signed off by October 15 and in force by December 31, the end of the transition period.
Although the UK formally left the EU in January, the country will continue to follow EU rules until the transition period ends while trade negotiations continue.
Recent talks have stalled due to disagreements on two key issues which are fishing quotas and rules over state aid.
Brussels has refused Britain's demands on fishing quotas with the UK wishing to see their number of vessels rising from the current 25 per cent to 50 per cent.
The EU also has concerns around state aid and Britain's policy for subsiding industries which it says will give UK businesses a big advantage over their EU rivals.
In a separate move, UK ministers are planning on drawing up new legislation on Wednesday called the Internal Market Bill, that would override the Brexit withdrawal agreement on Northern Ireland and eliminate parts of the agreement pertaining to state aid and customs declarations for Northern Ireland.
The new legislation would remove the need for new customs arrangements for Northern Ireland which were meant to prevent the return of checks at the border with the Irish Republic.
It is feared that the move could potentially lead to the collapse of any future talks.
UK government sources told the BBC that the new legislation was “not intended to derail the talks”, however, they conceded that the proposals may well “blow up” this week's negotiations.
The Labour Party accused Boris Johnson of “backing out of” his previous promises and that he was “threatening to renege on the UK’s legal obligations” calling it an act of “immense bad faith: one that would be viewed dimly by future trading partners and allies around the world”.
Simon Coveney, Ireland's minister of foreign affairs also condemned the move saying that any plan to change the agreement would be “very unwise”.
Foreign Secretary Dominic Raab was upbeat insisting that the deal was “still there for the taking”, however, he said that this week would be a “wake-up call for the EU side” and a “moment of reckoning”.
The next round of talks which take place on Tuesday and will aim at securing a free trade agreement permitting companies in the EU and UK to trade without the need for quotas, taxes or custom checks.
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