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PM Johnson gives EU 4 months to make a Brexit deal - or he walks

The UK's emphasis on sovereignty risks making it harder to reach a deal with the EU.


UK PRIME Minister Boris Johnson told the European Union he'll walk away from the negotiating table in June if it's not clear he's going to get a Canada-style trade agreement with the bloc. The pound fell.

London's negotiating mandate for the next stage of Brexit, released on Thursday, was in many areas close to what the EU published on Tuesday. The main differences were around how closely it will have to stick to EU regulations - the so-called level playing field, how the deal will be structured and governed, and what access to its waters the UK will give other countries' fishing fleets.

"We want the best possible trading relationship with the EU - but in the pursuit of the deal, we will not trade away our sovereignty," Cabinet Office Minister Michael Gove told the House of Commons on Thursday.

The UK is setting a tough timetable for the negotiations, saying it wants the broad outline of an agreement by June so it can assess whether the talks are on course to succeed. It will then decide whether to continue or "focus solely" on preparing to leave the EU's regulatory orbit without a deal on Dec 31. The competing UK and EU documents show where the arguments will be when talks start on Monday.

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The UK's emphasis on sovereignty risks making it harder to reach a deal with the EU. The pound fell after the document was released, erasing gains against the dollar and extending losses against the euro.

Canada's deal removed tariffs on 98 per cent of goods, but didn't require the country to join the EU's single market, apply the bloc's rules, or allow for free movement of people.

The EU argues Britain's size and proximity means simply replicating that agreement is unreasonable. The UK argues that neither obstacle is necessarily a factor in trade talks.

"Geography is no reason to undermine democracy," Mr Gove told parliament. "To be clear, we will not be seeking to dynamically align with EU laws, on EU terms governed by EU laws and EU institutions."

The UK said it won't agree to EU institutions, including the bloc's Court of Justice, having jurisdiction in the UK. It also wants the right to apply its own policies on taxes and state subsidies. The EU argues that position is a shift from the commitments Britain made in the Political Declaration, the non-binding part of its Withdrawal Agreement with the bloc.

The UK wants to be clear of EU labour and environmental regulation, and the bloc's rules on state aid, but Brussels argues Britain should continue to abide by its rules, and be policed by the European Court of Justice. To Mr Johnson's government, that is unacceptable.

Both sides, however, say they are committed to reaching a broad trade deal. BLOOMBERG

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