LONDON, June 22, 2019 (BSS/AFP) – Bank of England Governor Mark Carney on
Friday dismissed Boris Johnson’s claims that there would be a “standstill”
trade arrangement, in the event of a no-deal Brexit.
Johnson, who is leading the race to become Britain’s next prime minister,
had argued this week that current arrangements would continue after Brexit,
citing the General Agreement on Tariffs and Trade (GATT) article 24 of the
World Trade Organisation treaty.
“There will be no tariffs, there will be no quotas because what we want to
do is to get a standstill in our current arrangements under GATT 24, or
whatever it happens to be, until such a time as we have negotiated” a free
trade agreement, Johnson had said in a televised debate on Tuesday.
However, Carney flatly denied that this would be the case in an interview
with BBC Radio 4 on Friday.
“The GATT rules are clear. GATT 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,” Carney said.
The BoE chief added that, if the EU wanted not to apply tariffs to British
goods, then it would have to lower tariffs also to the rest of the world.
“We should be clear that not having an agreement with the EU means there
are tariffs automatically because the EU have to apply the same rules to us
as they apply to everyone else,” Carney continued.
“We should be clear that ‘no deal’ means ‘no deal’ — it means there is a
substantial change in the trading relationship with the EU.
“That may be the choice that the country takes but it should be a choice
that is taken with absolute clarity in terms of what that means.”
Former London mayor Johnson, who spearheaded the successful Leave campaign
in Britain’s Brexit referendum three years ago, will now face Foreign
Secretary Jeremy Hunt in a nationwide vote of Conservative Party members.
The winner will become leader of the Conservatives and succeed Theresa May
as prime minister, tasked with guiding the country through Brexit.
The BoE had warned Thursday that the prospect of Britain crashing out of
the EU without a deal has risen since last month, as it kept interest rates
unchanged at 0.75 percent.
During the 2016 referendum campaign, Carney had consistently argued that
Brexit would have a negative impact on the nation’s economy and spark a
possible recession, in claims which were denied by Brexiteers.
The BoE chief will step down on January 31, having extended his tenure
twice owing to uncertainty surrounding Brexit.
Britain is scheduled to leave the European Union at the end of October.