Boris Johnson says 'strong possibility' of no-deal exit, hints at Australia-style solution

British Prime Minister Boris Johnson has said that there is a "strong possibility" of a no-deal exit on December 31 after meeting with the European Commission President Ursula von der Leyen. Johnson has asked the public and the businesses to be prepared for the change on January 1st as an "Australia-style deal" is highly likely. It is important to note that Australia and the European Union don't have a free trade deal and they do the business on World Trade Organisation (WTO) terms. 

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What would a no-deal exit mean?

Prime Minister Boris Johnson has just been back from Brussels, where he met the EC President for in-person talks regarding the Brexit trade deal. However, it seems that the meeting did not go well as the Conservative leader is strongly hinting at a no-deal exit when the transition phase ends later this year. A no-deal exit for Britain would mean no free trade agreement with the bloc when the UK is officially out of the EU trade rules. This would hamper the businesses on both sides, especially in the UK, which sells most of its goods to the EU nations. 

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There are three main stumbling blocks that are stopping both sides from reaching an agreement. The UK and the EU are aggressively negotiating on fishing rights, level-playing fields, and governance. The talks are still going on between negotiating teams of both sides, but with Johnson's strong signal, it likely that the UK would exit the EU without a deal. 

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The United Kingdom left the EU on January 31, 2020, and is currently in its transition phase trying to secure a deal, with speed-breakers being fishing rights and level playing fields. The United Kingdom wants to take back control of its water, however, the European Union is seeking access as most of its ships fish in the English waters 89-90 percent of the time. The bloc has threatened to impose tariffs on Britain's products if the UK doesn't allow its ships to fish in English waters. 

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