International Trade Secretary Liam Fox has slapped down Boris Johnson over his claim Britain could use international world trade rules to continue tariff-free trade with the EU in the event of a no-deal Brexit.
Mr Johnson has argued that a provision under the General Agreement on Tariffs and Trade – known as Gatt 24 – could be used to avoid tariffs under World Trade Organisation (WTO) rules for up to 10 years.
But Dr Fox, a Brexiteer who is backing Jeremy Hunt for the leadership, said that would require the agreement of the EU, which Brussels had made clear would not be forthcoming.
The European Union has made it clear on a number of occasions that full tariffs will be applied to the United Kingdom in the event of ‘no-deal’Liam Fox
“In order to benefit from the terms of Article 24, there must be an agreement between two WTO members as to the elimination of duties and other restrictive regulations on substantially all trade,” he said in an article posted on LinkedIn.
“Therefore, Article 24 would not, by itself, allow the UK to maintain tariff-free trade with the EU in the absence of a negotiated agreement.
“A ‘no deal’ scenario, by definition, suggests that there would be no mutual agreement between the UK and the EU on any temporary or permanent arrangement. In those circumstances Article 24 cannot be used.
“The European Union has made it clear on a number of occasions that full tariffs will be applied to the United Kingdom in the event of ‘no-deal’.”
It certainly is an option, people are wrong if they say it's not an optionBoris Johnson
He added: “It is important that public debate on this topic is conducted on the basis of fact rather than supposition, so that we are able to make decisions in the best interests of our country.”
His comments echoed the Bank of England Governor Mark Carney who said that without an agreement with the EU, WTO tariffs would apply “automatically” in the event of no-deal.
In an interview with LBC on Tuesday, Mr Johnson insisted Gatt 24 did offer a possible “way forward” but accepted that Mr Carney was right to say it required “mutuality”.
“Where Mark is right, is saying that implies mutuality. There has to be an agreement on both sides,” he said.
“But he’s wrong in thinking it’s not an option. It certainly is an option, people are wrong if they say it’s not an option.”