UK could walk away from EU trade talks if progress not made by June

Boris Johnson could walk away from trade talks with the European Union in June unless there is the "broad outline" of a deal.

The UK's guidelines for the negotiations, which cover trade and other aspects of the future relationship with Brussels, sets the deadline for progress against a backdrop of deep divisions between the two sides over issues including fish, state subsidies and standards.

The Government has set out its plans for the talks ahead of the first round of negotiations on Monday, making clear that it "will not negotiate any arrangements in which the UK does not have control of its own laws and political life".

It clearly states the UK's intention to rely on World Trade Organisation terms under an arrangement with the EU similar to Australia's if progress on a comprehensive deal cannot be made.

Whatever the outcome of the talks, businesses have been warned to expect friction at the border from January 1 because the UK will not extend the transition period and will therefore be leaving the EU's single market and customs union.

A high-level meeting to take stock of progress is scheduled for June, by which time it should be clear whether the Canada-style comprehensive free trade agreement (FTA) sought by Mr Johnson is possible by the end of the year.

The negotiation guidelines envisaged the "broad outline of an agreement" by the June meeting, which would be "rapidly finalised" by September.

"If that does not seem to be the case at the June meeting, the Government will need to decide whether the UK's attention should move away from negotiations and focus solely on continuing domestic preparations to exit the transition period in an orderly fashion."

In the Political Declaration agreed by the Prime Minister and EU last year, the two sides agreed to work towards a deal "encompassing robust commitments to ensure a level playing field".

The EU's mandate called for any agreement to use Brussels' standards as "a reference point" over time – indicating that the UK could be expected to keep aligned with changes to the rules covering state subsidies, environmental standards and workers' rights in future, something that would breach Mr Johnson's red lines.

Downing Street insiders indicated Mr Johnson believes the mandate he won at the general election trumps the declaration, which does not have the status of a binding international treaty.

And they said Brussels had also moved away from the Political Declaration, pointing to the EU's mandate published on Tuesday going far beyond the agreed terms on the "level playing field".

In its document, the Government promises to carry out a consultation exercise on the "economic impact of the future relationship".

But officials acknowledged that whatever the outcome of the talks, there would be friction in trade between the UK and EU.

The UK will be taking steps to prepare for the end of the year, with infrastructure at ports to ensure that checks can be carried out.

Leaving the single market and customs union would require these processes to be carried out, even with a Canada-style deal.

For goods and services crossing borders there would be new processes in place – although the amount of friction could be reduced by a free trade deal.