The European Union stepped up planning for a "no-deal" Brexit yesterday after Prime Minister Boris Johnson's government refused to revoke a plan to break the divorce treaty that Brussels says will sink four years of talks.
Britain said explicitly this week that it plans to break international law by breaching parts of the Withdrawal Agreement treaty that it signed in January, when it formally left the bloc.
Britain says the move is aimed at clarifying ambiguities, but it caused a new crisis in talks less than four months before a post-Brexit transition period ends in December.
The EU has demanded that Britain scrap by the end of this month the plan to breach the divorce treaty. Britain has refused, saying its parliament is sovereign above international law.
"As the United Kingdom looks to what kind of future trade relationship it wants with the European Union, a prerequisite for that is honouring agreements that are already in place," said Pascal Donohoe, chairman of euro zone finance ministers.
"It is imperative that the government of the United Kingdom respond back to the call from the (European)Commission."
As the atmosphere soured between London and Brussels, Japan and Britain said they had reached agreement in principle on a bilateral trade deal that meant 99% of the Britain's exports to Japan would be tariff-free.
EU chief negotiator Michel Barnier said on Thursday, after talks in London, that the bloc was increasing its planning for a no-deal Brexit at the end of this year after trade talks made little progress.
"The UK has not engaged in a reciprocal way on fundamental EU principles and interests," Barnier said. "Nobody should underestimate the practical, economic and social consequences of a 'no deal' scenario."