Liam Fox has insisted that the UK “can of course survive” crashing out of the EU without a deal after Brexit. But the international trade secretary also talked up the prospects of a comprehensive free trade agreement with the bloc once Britain had left, saying it should be “one of the easiest in human history” to agree.
“We’re already beginning with zero tariffs and maximum regulatory equivalence,” he said. “The only reason we wouldn’t come to a free and open agreement is because politics gets in the way of economics.”
Dr Fox said that although ministers wanted a deal, Brussels had to believe the UK would be prepared to walk away without an agreement. He added that it was important for Brussels to recognise that Theresa May’s slogan that “no deal is better than a bad deal” still stood.
He told BBC Radio 4’s Today programme: “We don’t want to have ‘no deal’: it is much better that we have a deal than no deal. We can of course survive with no deal and we have to go into a negotiation with those on the other side knowing that’s what we think. But of course we want to come to a full and comprehensive deal with the European Union.”
Yesterday Dr Fox used a speech at the World Trade Organisation (WTO) to insist that “geographic proximity” was increasingly irrelevant to trade. “Globalisation has eliminated many of the barriers of distance and time that once separated nations,” he said.
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An expert has warned that the lobbying power of American cattle ranchers poses an obstacle to Britain reaching a trade deal with the United States after Brexit. Hormone-treated beef, banned by the European Union, may have to be cleared for sale in British supermarkets as the price of a comprehensive free trade agreement with the Americans.
The hurdles to trade after Brexit are outlined by David Collins, professor of international economic law at City, University of London, in a paper for the Eurosceptic think tank Politeia.
“It is not clear what stance the UK will take regarding certain controversial products like hormone-treated beef or genetically modified organisms,” Professor Collins writes.
“This could present an obstacle to a [deal] with a country like the US were the UK to insist on retaining EU-type restrictions on these products.”
He suggests Britain could justify allowing such food in after Brexit. The WTO’s own dispute settlement tribunals have already ruled against the EU’s restrictions on these products.
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“The UK could follow global, scientific consensus and allow these products by recognising US product assessment procedures.”
Britain is unlikely to be in a strong bargaining position to set the terms of a deal on financial services with America, he says. “A US-UK FTA could be somewhat more problematic in this regard given the US dominance and the evident intent of the new US government to de-regulate financial services going forward.” Fears that the NHS would be opened to US firms were “a classic case of scaremongering” as public health was routinely excluded in FTA agreements, he added.