Prime Minister Boris Johnson is expected to say that if there is no agreement on trade between the EU and the UK by October 15, both sides should “accept it and move forward”.
Mr Johnson would say completing the exit from the UK without trade deals from the EU would still be a “good result”.
It comes after UK chief negotiator David Frost said the UK was “not afraid” to flee.
Eighth Tuesday – The second round of negotiations is set to begin on Tuesday.
But on the eve of the talks, the Financial Times reported that the UK is planning new legislation that would override key parts of the Brexit withdrawal agreement reached last year.
The new bill would remove the legal power of the system over the customs of Northern Ireland, which was created to avoid a strict border with the Irish Republic.
It will also override state aid provisions – sometimes financial assistance provided by the government to companies.
Government sources told the BBC the law would be introduced this week, calling it a “prudent fall-back option” if negotiations broke down.
They said it was not “intended to derail the talks”, but the EU’s chief diplomat told the BBC it was “a self-defeating strategy” that would allow trade talks to be resolved together.
On Sunday, Foreign Secretary Dominic Rabe told the BBC’s Rendrew Marr program that there were two outstanding issues in the rules on negotiations, fishing rights and state aid.
The prime minister says time is running out to find a solution when the UK’s transition period ends before 31 December. Although the UK left the EU on 31 January, it continues to adhere to certain EU rules while negotiating a trade agreement.
“We are now entering the final phase of our negotiations with the EU,” Mr Johnson is expected to say.
He says an agreement needs to be reached by the European Council on October 15 if it is to be implemented by the end of the year, so “there is no point in thinking about a timeline that goes beyond that issue”.
“If we can’t agree until then, I don’t see a free trade agreement between us, and we should both accept it and move on,” Mr Johnson said.
The UK has said it wants to attack a deal with the EU that looks like Canada. But Mr Johnson would say that a no-deal means “trading alignment with the EU, like Australia,” using trade protocols set by the World Trade Organization.
The Prime Minister will say, “I want to be absolutely clear that, as we have said from the beginning, it will be a good outcome for the UK,” the Prime Minister will say.
“We are preparing to be ready for it, at its borders and ports,” he said, adding that groups representing road haulers have warned the UK that it is “sleeping in disaster”.
‘Always ready to talk’
“We will have full control over our laws, our regulations and fishing waters,” Mr Johnson would say.
“We will have the freedom to do business with every country in the world. And as a result we will grow faster.”
The Prime Minister expects the UK to “always be ready to talk to our EU friends” even if it has “reasonable facilities” on “practical issues” including flights, lorries and scientific cooperation.
He will say that if the EU is ready to reconsider its position “even at this final stage” it will still have to reach an agreement.
“But we cannot and will not compromise on the fundamental issues of what it means to be an independent country to get it.”
The EU’s chief negotiator, Michael Barnier, had earlier suggested that the end of October was a “strict deadline” for finalizing the agreement for next year.
He said he was “open to finding a solution” but that the UK would “move” if it wanted to avoid the consequences of a deal.