Business is appealing for clarity on future trading arrangements with the EU after Boris Johnson made clear he is ready to take the country to a no-deal Brexit at the end of this year.
The pound tumbled against the euro and US dollar after Mr Johnson used a high-profile speech to declare he would walk away without a free trade agreement if Brussels insisted on the UK keeping to European rules on state aid or social and environmental protections or being subject to the rulings of the European Court of Justice.
His comments came shortly after the EU’s chief Brexit negotiator, Michel Barnier, said Britain will have to stay aligned to EU rules in a whole set of areas after Brexit if it wants a trade deal.
Launching the EU’s negotiating mandate in Brussels, Mr Barnier said tariff- and quota-free access to EU markets was dependent on the inclusion of “a mechanism to uphold the high standards we have on social, environmental, tax and state aid matters today and in their future developments”.
He warned that the EU would be “very demanding” in its requirements on the UK and that its objective was “to ensure that [regulatory] divergence doesn’t become an instrument for unfair competition whereby there would be disadvantages for EU industry”.
But Mr Johnson insisted that the UK would maintain “the highest standards” in all these areas anyway after Brexit, and that there was “no need” for a free trade treaty to compel adherence to Brussels regulations “any more than the EU should be obliged to accept UK rules”.
However, in a move which will alarm Brussels, he appeared to open the door to accepting genetically modified crops from the US, which are currently banned in the EU. Dismissing objections to certain American agricultural products as “mumbo-jumbo”, he echoed language adopted by US trade negotiators over GM by saying that Britain would be “guided by the science”.
Objections to certain American foodstuffs were driven by “hysteria” and “paranoia”, suggested the prime minister, who appeared to draw a line between chlorinated chicken – which he said was an animal welfare issue – and other controversial American agricultural practices.
“We will not accept any diminution in food hygiene or animal welfare standards,” he said. “But I must say to the America-bashers in this country – if there are any – that in doing free trade deals we will be governed by science and not by mumbo-jumbo because the potential is enormous.”
“I look at the Americans and they look pretty well nourished to me. I don’t hear any of these critics of American food … complaining about the quality of the food they are offered in the United States. So let’s take some of the paranoia out of this argument.”
