The head of the Bank of England, Mark Carney, commented on Boris Johnson’s trade related Brexit statements on Friday, June 21st. Carney dismissed Boris Johnson’s plans on tariffs should he become the next prime minister of the UK.
Johnson is currently the frontrunner in the race to become the next leader of the Conservative party and to succeed the prime minister, Theresa May. Laying out his plans on how he would deal with the deadlock over Brexit, Johnson has said he would ensure that the UK leaves the European Union by the scheduled date, October 31st, if necessary, without a deal in place.
Further quizzed on the possible consequences of such a decision, Johnson suggested that tariffs on trade with the European Union could be avoided. He said Britain could rely on a provision in international trade rules to make sure trade relations remain unchanged, a claim that Carney strongly dismissed. Speaking to the BBC, Carney said it was not possible if there was no deal between the EU and Britain.
According to AP, Carney explained that the legal provision in the General Agreement on Tariffs and Trade, "applies if you have an agreement, not if you have decided not to have an agreement or have been unable to come to an agreement." He continued by saying the UK would automatically be hit by tariffs, as the Europeans would have to apply the same rules to Britain as to every other country outside the tariff-free EU. "If they were to decide not to put in place tariffs, they would also have to lower tariffs for the United States and with the rest of the world," he said. "And the same would hold for us."
The Bank of England held a policy meeting on June 20th and issued a warning afterwards. The likelihood of a no deal Brexit had increased, it said. Britain's scheduled departure date from the EU, which was originally set for March 29th, has been pushed back to October 31st but the country still faces uncertainty as to whether the country will leave then.