Fox warns EU leaders over potential impact of no deal Brexit
The International Trade Secretary urged leaders of the EU27 to engage with the Chequers plan as he set out proposals for the UK’s trade deals.
EU leaders have been told the “ball is in their court” over the Chequers Brexit plan as a Cabinet minister warned of the catastrophic damage a “no deal” situation could do to their economies.
International Trade Secretary Liam Fox warned that countries with close business links to the UK – such as Ireland – would suffer a hit of up to 8% of GDP from a failure to reach a Brexit agreement.
His comments came as he launched consultations on post-Brexit trade deals and hinted that tariffs on imports of American cars could be reduced to secure an agreement with Donald Trump.
We have made an offer to the EU27 ... we think that's a fair and reasonable deal and they have to understand what no deal might mean as a consequence to their economies Liam Fox
In a stark message to the leaders of EU nations – which have so far remained publicly united in their stance on Brexit – Dr Fox highlighted how some would be hit far more than others if there was no trade deal for the UK.
“We have made an offer to the EU27. The ball is now in their court,” he said.
“We think that’s a fair and reasonable deal and they have to understand what no deal might mean as a consequence to their economies.”
The impact would be “very disproportionately shared and might mean reductions in GDP of something like 4% for the Netherlands, 3.5% for Belgium and 7% or 8% for Ireland”.
That was why the EU needed a “people’s Brexit, not a bureaucrats’ Brexit”, where the economic prosperity of citizens was placed about the “abstract ideology of the Brussels bureaucrats”, he said.
Dr Fox, who backed the Chequers plan despite the resignations of fellow Brexiteers David Davis and Boris Johnson, insisted it gave the UK freedom to strike trade deals despite the proposal for aligning with Brussels’ rules on goods.
“We will have absolute freedom to change our quotas and our tariffs, including on manufactured goods, under the agreement in Chequers,” he said.
He highlighted Mr Trump’s concerns about the 10% tariff imposed on American cars entering the European Union, while vehicles from the bloc attracted a 2.5% tariff when exported to the US.
“When we leave the EU, if it is under that Chequers agreement, we have absolute freedom to change those manufacturing tariffs and that at the moment is one of the key focuses that the US has.”
Today @LiamFox announced that the UK will consult on potentially seeking accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Find out what this will mean for 🇬🇧 business 👇— Department for International Trade (@tradegovuk) July 18, 2018
In a speech in London he announced four new public consultations on future trade deals, which will begin soon to allow UK-US negotiations to begin immediately after Brexit in 2019.
The public consultations, which will last 14 weeks, will cover potential deals with the US, Australia and New Zealand.
They will also consider the potential for joining the multinational Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) even though the bloc is on the other side of the world.
Dr Fox said the public consultations were aimed at avoiding the backlash that faced the aborted EU-US Transatlantic Trade and Investment Partnership deal.
Although the Chequers plan also included stepping up preparations for a “no deal” Brexit, Dr Fox said he was focused on ensuring a balance between maintaining links with the EU and opening up opportunities outside the bloc.
“People will say it’s a compromise as though that’s a bad word. What we want is the best outcome for British business, British consumers and British trade, which is what I thought the Government was meant to do.”