LONDON – British Brexit talks with the European Union once again tipped into an abyss on Friday after Prime Minister Boris Johnson declared his government tired and ready for a non-agreement from the bloc’s trading system and with his chief negotiator canceling scheduled talks to next week in London.
European leaders reacted coolly to Johnson’s threat, making it clear that they were ready to continue talking and acknowledging that both parties needed to give reason to reach a trade agreement by the 31 December deadline.
Mr. Johnson, who had set a self-imposed deadline this week to assess whether negotiations should continue, delivered his warning after a summit with EU leaders in Brussels, which resulted in what the Prime Minister called an unreasonable demand that Britain make the biggest concessions.
Despite all its bluster, history suggested that the negotiations were less likely to collapse than to enter into a climactic final act that promised even more of the theatricality and brinkmanship that has characterized the Brexit drama from the start.
There are real gaps between Britain and the European Union: the two are in conflict with fishing quotas – an issue that is very sensitive politically in neighboring France. And the two sides do not yet agree on the rules of state aid to industry or a way to resolve disputes over this funding.
The calendar poses another risk: As the deadline for an agreement approaches, the loss of a week or several weeks of conversations can make it difficult for the two sides to reach a solution in time. If they sign, Britain would have to start trading with the bloc under what Johnson Johnson euphemistically calls Australian rules – in other words, under the standard terms set by the World Trade Organization.
“We want to thrive as an independent free trade nation that controls our own borders, our fisheries and sets our own laws,” he said.
In fact, analysts said Britain would be hit by severe disruption, including long queues of trucks on the English Channel, and a severe blow to its economic growth, on top of the already painful distortion caused by the coronavirus pandemic. Britain’s fight to curb the latest wave of infections has almost escaped the latest Brexit news.
Given the frightening realities, analysts said they still believed Mr. Johnson bluffed and ended up making a deal. The likelihood that Britain will have to compromise, they said, made it even more important for the prime minister to look like he is running a tough trade with the European Union.
Sam Lowe, a senior researcher at the Center for European Reform, a research institute, described the prime minister’s statement as “high-stakes theatrics” and said he still believed an agreement was more likely than not because both sides had recently switched further some of their red lines.
“These kinds of performances are part of the negotiations,” he said. “We are at a crunching point where the difficult political compromises have to be made, but where there is also a need to appear tough on the domestic public.”
Mr. Johnson’s move was a “controlled explosion,” said Mujtaba Rahman, an analyst at political risk consulting firm Eurasia Group. But it masked potential openings for compromise, especially with France on fishing rights.
Downing Street claimed that the European Union had effectively ended the negotiations by adopting formal conclusions from the summit, which called on Britain to compromise and did not mention an intensification of talks.
British officials said there was no point in more negotiations next Monday unless the European Union was ready to discuss legislative texts more quickly without Britain being required to take any action.
Without such conditions, officials said, the only issue worth discussing would be practical preparations for an exit without agreement, including how to deal with issues such as aviation, road transport and nuclear cooperation.
However, European leaders seemed to meet some of the conditions required by Britain, especially when German Chancellor Angela Merkel recognized the need to give and take both sides.
“We have asked the United Kingdom to remain open to compromise so that an agreement can be reached,” Mrs Merkel said on Thursday. “This means, of course, that we will also have to compromise.”
On Friday, European Commission President Ursula von der Leyen promised to “intensify” the talks – as Britain has called for – and said her negotiating team would travel to London next week.
Later in the day, Downing Street said Johnson’s dealer, David Frost, told Europeans it did not make sense for them to come, but added that he and his interlocutor, Michel Barnier, would still speak next week – suggesting lines communication remains open even though there will be no formal negotiations.
Barnier’s spokesman gave a different account of the conversation, saying the two men agreed to speak again Monday “to discuss the structure of those conversations.”
The financial markets took the latest drama in stride – perhaps aware that as long ago as February, Johnson threatened to walk away from the negotiations within four months if things did not go his way.
“Some saber-rattling is part of any international trade negotiation,” wrote Kallum Pickering, senior economist at Berenberg Bank in London. “In our opinion, Johnson’s message seems to be more of a negotiation tactic in the hope of reaching an agreement rather than a genuine desire to end ongoing talks immediately.”
However, British companies were less relaxed and warned of huge price increases for consumers due to tariffs and delays and interruptions at the border.
“The Prime Minister’s statement signals that we are heading into a very dangerous area,” said Ian Wright, CEO of the Food and Drink Federation, a British industry association, in a statement. “In the event of a no-deal Brexit, shoppers will – literally – pay a high price.”
Allie Renison, a senior policy adviser at the Institute of Directors representing Britain’s business leaders, said that “getting ready for no deal in the midst of a pandemic will be a herculean task for many companies.”