BORIS JOHNSON will today warn the European Union he is ready to walk away from trade talks rather than see the UK follow rules set by Brussels after Brexit

As the two sides stake out hardline opening positions ahead of formal trade talks starting next month, the Prime Minister will use a speech to business leaders and diplomats in London to say he will not accept alignment with key EU rules, resurrecting the prospect of a no-deal Brexit at the end of the year.

The PM will say he would rather have an “Australia-style deal”, the new Whitehall jargon for the UK falling back on bare-bones World Trade Organisation (WTO) rules, if he cannot get the package he wants.

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Mr Johnson previously guaranteed the trade talks would be a success.
He has now dropped that line and says they are “very unlikely” to fail. 

It follows reports the PM had been “infuriated” by recent EU demands on alignment over state aid and abiding by the EU courts on trade disputes.

Foreign Secretary Dominic Raab accused Brussels of trying to “shift the goal posts” and said following EU rules after 2021 “just ain’t happening”.

Irish PM Leo Varadkar yesterday warned the UK not to box itself in by setting red lines so early in the talks.

Mr Johnson is expected to say: “There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules. 

“The UK will maintain the highest standards in these areas – better, in many respects, than those of the EU – without the compulsion of a treaty and it is vital to stress this now.

“We have often been told that we must choose between full access to the EU market, along with accepting its rules and courts on the Norway model, or an ambitious free trade agreement, which opens up markets and avoids the full panoply of EU regulation, on the example of Canada.

“We have made our choice: we want a free trade agreement similar to Canada’s, but in the very unlikely event that we do not succeed, then our trade will have to be based on our existing Withdrawal Agreement with the EU.

“The choice is emphatically not ‘deal or no-deal’. The question is whether we agree a trading relationship with the EU comparable to Canada’s - or more like Australia’s. In either case, I have no doubt that Britain will prosper. And of course our new relationship with our closest neighbours will range far beyond trade.

“We will seek a pragmatic agreement on security, protecting our citizens without trespassing on the autonomy of our respective legal systems.”

The UK Government will detail its position on future negotiations in a ministerial statement, as the EU also publishes its mandate for the talks.

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A Canada-style deal would allow tariff-free trade for most goods, but not cover the service sector that accounts for 80 per cent of UK jobs.

In recent days, it has been reported Brussels wants the UK to stay aligned to key EU rules and standards and accept the jurisdiction of the European Court of Justice (ECJ) when it comes to adjudicating on trade disputes.

Mr Johnson will reject both while staying close to current EU rules on workers’ rights, food hygiene standards and environmental protections.

Canada’s trade deal with the EU took seven years, however Mr Johnson wants his done in 10 months, and has banned any extension of talks in law.

Government sources said that if a Canada-style deal isn’t agreed, the UK could have an “Australia-style” arrangement based on WTO rules, with additional mini-deals tacked-on.

However that may well be a bluff, as it would impose more red tape and costs on business, and ultimately voters, and potentially damage the UK economy.

Mr Raab told the BBC: “We’re not going to be aligning with EU rules, that’s not on the negotiating table, it’s not even an issue of red lines – it is not even in the negotiating room.

“We are entering into these negotiations with a spirit of goodwill.

“But we are just not doing that other stuff. The legislative alignment, it just ain’t happening.”

Accusing the EU of reneging on its previous acceptance that a new body, not the ECJ, would adjudicate on trade disputes, he said: “We all agreed that we weren’t going to do that. You knew that, you signed up to the withdrawal agreement and political declaration on that basis. Why are you trying to shift the goalposts?”

“We are proceeding on the basis of democratic control over our laws, that is totally inconsistent with a dispute resolution which is decided by the other side through the ECJ.”

But Mr Varadkar said that if the UK wanted a tariff-free deal it must accept a “level playing field” in certain areas. 

The Taosieach also suggested the EU would demand access to UK fishing waters deal as part of the talks - another potential headache for Mr Johnson. 

He said: “I think we will need an agreement on fishing. We do share seas - the Irish Sea, the Channel, the North Sea. 

“The fish don’t know where the boundary is, so we’ll need to have an agreement on access to fishing waters and fishing rights.

“Seventy per cent of the fish that you land in the UK actually gets sold to European markets. So you’re going to need access to our markets to be able to sell all the fish that you land.

“If you don’t have that you’ll have to find alternative markets and will probably end up getting a lower price for your product. So it makes sense that we have an agreement that gives us access to each other’s waters.”

Shadow Chancellor John McDonnell called Mr Raab’s comments “sabre-rattling” and “puerile”.