Britain will not back down in trade talks with the European Union and will thrive even if breaking away from the bloc without a trade deal is a “choppy” ride, Culture Secretary Oliver Dowden said on Friday.
The United Kingdom quit the EU in January but remains an informal member until Dec. 31 when it will finally leave the bloc’s orbit after 48 years – with or without a trade agreement.
Prime Minister Boris Johnson said on Thursday, as EU leaders were meeting in Brussels, that there was “a strong possibility” Britain and the EU would fail to secure an agreement.
Echoing Johnson, Dowden said there was still a chance of a deal, and negotiations are set to continue until Sunday. He said Johnson wanted an agreement but no British leader could accept the EU’s demands on fishing rights and allowing Britain to be punished if in the future it diverged from the bloc’s rules.
“Still, I think, there is a significant possibility that we could get that deal,” Dowden, who voted to remain in the EU in the 2016 Brexit referendum, told Sky News. “That deal cannot come at any price.”
“If it comes to it, it will be choppy but we can survive and indeed thrive over the longer run,” Dowden said of a no-trade deal Brexit.
While some EU diplomats have cast Johnson’s rhetoric as theatrics intended to wrench out a deal and please his domestic Brexit supporters, British officials say London cannot accept the EU’s demands and caution that a no-deal is on the cards.
A no-trade deal Brexit would damage the economies of northern Europe, send shockwaves through financial markets, snarl borders and sow chaos through the delicate supply chains which stretch across Europe and beyond.
Most major investment banks say a deal is their central prediction, but some investors recall that Wall Street and the City of London were poorly prepared for the 2016 referendum as few believed Britain would vote to leave.
British and EU negotiators seeking a new arrangement on nearly $1 trillion in annual trade have been stuck on two main issues for weeks: how much fish EU boats can take from British waters and how far the EU can tie Britain into its rules in the future.
Trucks heading towards the English port of Dover were stacked up for miles on Thursday. Reuters pictures showed truck queues snaking into the night-time horizon.
A failure to agree a free trade deal would wipe an extra 2% off UK economic output – in addition to the 4% drop from leaving the bloc with a deal – while driving up inflation, unemployment and public borrowing, Britain’s Office for Budget Responsibility said last month.