Liam Fox admitted today the UK has not signed deals to continue free trade with countries who already have agreements with EU - meaning even more tariffs could go up after Brexit.
Appearing before the International Trade Select Committee this morning, Fox said the UK had conducted “initial discussions” with the 65 countries to continue trading on the same terms after Brexit.
Yet despite a tweet from former Trade Minister Lord Price claiming deals had already been struck, Fox was forced to admit nothing had been signed, and was merely “hopeful” agreements would be reached by March 2019.
Fox’s chief negotiator Crawford Falconer warned MPs that even agreements struck in principle could be tossed aside as countries seek to improve trade deals.
Under a grilling from Labour MP Chris Leslie, Fox said he has “not had any indication from any of trading partners in those countries” that they did not want to continue trading with the UK on the same terms as they do currently.
When pushed on whether anything had been signed to guarantee that, Fox said: “Well we haven’t got agreement with them but they’ve agreed with the process.”
Fox said the text of the current EU trade deals would be used as the basis for any agreement, adding: “We have had initial discussions with them and we are now beginning to get more granular with the most important ones of them and as we go through the process we will get closer to agreements.
“When we’ve got the agreements with the biggest we will work our way through the others. Hopefully finishing them all by the time we leave the EU.”
Falconer, who was appearing alongside Fox, added: “They have agreed that that’s what they intend to do.
“All I would say is I’ve been around negotiations a lot and what people say today sometimes changes tomorrow.”
If the UK does not secure a carry-over of the EU’s deals after Brexit, it will find World Trade Organisation tariffs applied on trade with countries such as South Korea and Israel.
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Fox also told MPs he believes it is “reasonable” for businesses to begin preparing for no deal.
His comments came a day after it was reported the Bank of England is preparing itself for 75,000 job losses from the financial sector if the UK leaves the EU without a trade deal.
When asked if the believed the private sector should begin implementing contingency plans for a “no deal”, Fox replied: “No, because on balance at the present time I think we’re more likely to get a deal but I think it would be reasonable for them to develop such plans.
“Clearly, the longer we take to get into end state discussions with the European Union, the greater the likelihood that people would want to implement as well as a develop, which is why I think it’s in all our interest to get into those end state discussions as early as possible so business has greater certainty about what the potential end state looks like.”
He added he was “not afraid” of leaving the EU without a trade agreement.