Britain has warned the European Union that it would override parts of its divorce deal with the EU unless the latter agrees to a free trade deal by Oct. 15. The UK left the EU in January, but it has until the end of 2020 to forge a post-Brexit trade agreement with the bloc.
The UK is planning to create fresh legislation to override key parts of the Brexit Withdrawal Agreement which, if implemented, could endanger the January treaty and spark tensions with Northern Ireland. Three sources familiar with the plans said the aim was to “eliminate the legal force of parts of the withdrawal agreement,” specifically in areas covering state aid and Northern Ireland Customs.
“If we can’t agree by then, then I do not see that there will be a free trade agreement between us, and we should both accept that and move on,” said British prime minister Boris Johnson on Monday.
Oct. 15 is the U.K.’s self-imposed deadline to strike a deal. While the country left the E.U. on Jan. 31, talks on a fresh trade deal before the end of a status-quo transition deal in December have caught on state aid rules and fishing. Without an agreement, about $1 trillion in trade between the U.K. and the E.U. would remain in the balance.
Members of the ruling Conservatives who support the Brexit previously denounced the Withdrawal Agreement, saying it poses constitutional dangers to Britain. However, parties on both sides of the Irish border condemned the Monday reports exposing Britain’s plan to undermine the treaty.
“If the UK chose not to respect its international obligations, it would undermine its international standing,” said an EU diplomat. “Who would want to agree on trade deals with a country that doesn’t implement international treaties? It would be a desperate and ultimately self-defeating strategy.”
On Monday, Sterling slumped against the U.S. dollar and the Euro following the threat but currency analyst Jordan Rochester said the news was just “the cherry on top of the cake.” The analyst said the British pound would continue to fall over the next few weeks as the EU summit in mid-October approaches.
“And if we do get an actual announcement of no deal, prepare for a hard Brexit, the pound should continue to weaken, we’re talking something like 95 to 08 pence against the euro,” he said.

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