After his big election win, Prime Minister Boris Johnson plans to outlaw any extension of a planned Brexit transition period beyond 2020 and use the prospect of a cliff-edge to demand a comprehensive free trade deal in less than 11 months.
"Given all the signals... we are well advised to take seriously that the UK does not intend to go for an extension of the transition and we need to be prepared for that," said Sabine Weyand, director-general of the EU's trade department.
"That means in the negotiations we have to look at those issues where failing to reach an agreement by 2020 would lead to another cliff-edge situation," she told a European Policy Centre think tank seminar.
Weyand said the European Commission, which coordinates trade policy for EU countries, was ready to start negotiations very quickly after Britain formally left the EU on Jan. 31 and was very clear about its priorities.
Any duty-free, quota-free deal would need to be accompanied with guarantees of a level playing field in areas such as state aid and competition, environmental and labor law and taxation.
This would go beyond requirements set in recent deals with Japan or Latin America because they are further away and less economically integrated with the EU than Britain.
The two sides will also be looking for deals in other areas, such as fisheries, security and aviation.
"All these things need to be coordinated so that we maximize our negotiating leverage," Weyand said.
"SLEEP-WALKING" INTO NO-DEAL?
The Commission was due on Tuesday to brief the remaining 27 EU countries on its work program for negotiations with Britain from January until the end of 2020.
One EU diplomat said Johnson's proposed deadline would leave both sides worse off.
"Haste will come at the expense of services and security. This means we are pretty much guaranteed a WTO-style exit," the diplomat said, referring to World Trade Organization rules that kick into force in the absence of a full-fledged trade deal.
A second EU diplomat said the EU was ready for any eventuality.
"The EU's position hasn't changed: we want to negotiate a good deal with our close British neighbors. But if the UK limits its options prematurely and... sleepwalks into a no-deal at the end of 2020, the EU would be well-prepared, ready to mitigate the effects on its member states," he said.
Experts say it will be hard for the EU and Britain to wrap up a comprehensive trade deal in less than a year even though they are already closely aligned on rules and regulations.The fastest major trade pact the EU ever concluded was with South Korea, reached in 2009 after two-and-a-half years of negotiation. It came into force nearly two years after that.