LONDON • British Prime Minister Boris Johnson said yesterday it is now time to prepare for a no-trade deal Brexit in 10 weeks as the European Union had refused to negotiate seriously, adding that unless Brussels changed course there would be no agreement.
A tumultuous "no-deal" finale to the United Kingdom's five-year Brexit crisis would sow chaos through the delicate supply chains that stretch across Britain, the EU and beyond - just as the economic hit from the coronavirus pandemic worsens.
At what was supposed to be the "Brexit summit" on Thursday, the EU delivered an ultimatum. It said it was concerned by a lack of progress, and called on London to yield on key sticking points or see a rupture of ties with the bloc from Jan 1.
"I have concluded that we should get ready for Jan 1 with arrangements that are more like Australia's, based on simple principles of global free trade," Mr Johnson said. "With high hearts and with complete confidence, we will prepare to embrace the alternative and we will prosper mightily as an independent free-trading nation, controlling and setting our own laws."
A so-called "Australia deal" means that the United Kingdom would trade on World Trade Organisation (WTO) terms: As a country without an EU trade agreement, like Australia, tariffs would be imposed under WTO rules, likely causing significant price rises.
Mr Johnson's remarks, which follow an EU demand that London make further concessions, may push Brexit towards chaos, though he still left open the possibility that the EU could change course and offer Britain a better deal. "Unless there is a fundamental change of approach, we're going to go for the Australia solution. And we should do it with great confidence," he said.
Asked if he was walking away from talks, Mr Johnson said: "If there's a fundamental change of approach, of course we are always willing to listen, but it didn't seem particularly encouraging from the summit in Brussels."
In Brussels, an EU official and a diplomat told Reuters the bloc was still preparing for more trade talks in Britain next week. "He didn't say they will leave the negotiating table. So it's all just rhetoric," the diplomat said. The EU official said the bloc's Brexit negotiating team was "already packing for an intense week in London".
Sterling dropped sharply after Mr Johnson's remarks that businesses, hauliers and travellers should get ready for a clean break from Europe.