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The Prime Minister once again warned Brussels the UK will walk away from trade talks following German Chancellor, Angela Merkel’s threat to Britain. During a conversation with Polish Prime Minister, Mateusz Morawiecki, Mr Johnson insisted the UK was prepared to leave on Australia terms if no agreement was soon reached. Mr Johnson’s warning comes after Ms Merkel warned Britons will have to live with the consequences of abandoning close ties with the EU. 

The Mutual Recognition Agreement between the EU and Australia is an agreement which facilitates trade in industrial products by reducing technical barriers. 

The agreement is not a free trade treaty but may provide the basis for one in the future and currently operates on several bilateral agreements in multiple sectors. 

A No 10 spokeswoman said today: “On the UK’s future relationship with the EU, the Prime Minister welcomed the agreement on both sides to an intensified process of negotiations in July.

“He said the UK would negotiate constructively but equally would be ready to leave the transition period on Australia terms if an agreement could not be reached.”

After a virtual summit this month, EU and UK officials agreed to expedite talks in pursuit of a free trade agreement. 

While agreeing neither side would extend the transition period, UK and EU officials insisted a deal must soon be reached to complete the process by the end of the year. 

Mr Johnson, however, has indicated the possibility of a deal being complete by next month. 

In contrast, in a leaked government document, Germany has stated its belief talks could last until September. 

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Ahead of Germany assuming the rotating presidency of the EU Council on July 1, Ms Merkel stated the UK must be prepared for distant ties with Europe after Brexit. 

She said: “With Prime Minister Boris Johnson, the British Government wants to define for itself what relationship it will have with us after the country leaves.

“It will then have to live with the consequences, of course, that is to say with a less closely interconnected economy.

“If Britain does not want to have rules on the environment and the labour market or social standards that compare with those of the EU, our relations will be less close.”

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Intensified talks are set to begin between the two sides next week. 

There still remain several areas of divergence between the sides, namely fair and equal competition, fisheries and access into the single market. 

The UK’s chief negotiator, David Frost has stated the EU still doesn’t grasp the meaning of Brexit – Britain’s sovereignty. 

That pursuit for the UK to be independent has driven Mr Johnson to reject any level playing field agreement. 

The EU also wants to include a dispute mechanism between the two sides. 

Under this mechanism, any violation of the deal would allow either side to suspend parts of the relationship. 

In a statement, Mr Frost said: “The next round of talks with the EU begins on Monday 29 June.

“This is the start of the intensified process.”

“For the first time since March we will meet face to face, in Brussels.

“We look forward to welcoming the EU team to London the week after.

“These meetings will be smaller and focused on seeing whether we can begin to make genuine and rapid progress towards an agreement.”

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