Liam Fox's 'error' in admitting no Brexit trade deal would cost British firms a fortune
Local MP and Brexit trade minister Liam Fox has had to embarrassingly withdraw a statement after he admitted British businesses could end up paying ‘devastating’ 12 per cent tariffs on goods they sell to France, Germany, Ireland and the rest of the EU.
The North Somerset MP, who has been appointed to head the trade department, issued a press statement aimed at reassuring businesses that they would still be able to trade with other EU countries.
But it ended up doing the exact opposite, after Mr Fox’s statement candidly admitted that if no deal can be struck with the EU over free trade before Britain leaves the European Union, then trade arrangements will revert to the default World Trade Organisation standard.
The press release posted on Mr Fox’s department website initially said: “If the UK does exit the European Single Market, it will be governed by World Trade Organization (WTO) rules until any new trade deals are negotiated.
“We’ll remain a competitive player on the global stage because all major economies and most minor ones are members of the WTO. The WTO requires each member to charge the others the same tariffs and grant them ‘most favoured nation’ market access,” it added.
Labour’s Chuka Ummuna immediately pointed out that this would severely damage Britain’s businesses that export abroad, adding ten or 12 per cent onto the price of goods like cars and clothes, forcing the price of a £20,000 car made in Britain and sold in Germany up by £2,000.
“To put Liam Fox’s announcement today in context, trading under WTO rules with the EU means 10 per cent levy on cars, 12 per cent on clothes and more. Crazy,” said Mr Umunna. “Fox’s WTO strategy would devastate vital export industries, like car manufacturing, and lead to higher prices in the shops for families.
Read more: Liam Fox MP launches Tory leadership bid
“Trading with the EU under WTO rules would be a hammer blow for the economy, and would demonstrate the hollow nature of Vote Leave’s promises,” he said.
“Ministers should be doing everything they can to stay in the Single Market and get the best trade deal for Britain not throwing in the towel. Leave campaigners promised repeatedly we would get a free trade agreement with the EU – now Fox seems to admit this will not be achievable,” added Mr Umunna.
Leaders of countries in the European Union have consistently insisted that one of the non-negotiable parts of any Brexit deal will be linking Britain’s continued free trade with EU countries to the free movement of people. Last week, Norway – a country which is outside the EU but has a free-trade, free movement of people deal with the EU – declared it would not agree to or allow Britain to negotiate a different deal with the EU which limited possible migration but allowed free trade.
Mr Fox’s statement on Brexit was pulled from his department’s website within hours, and officials admitted it was ‘a draft which was published in error’, even though the statement on the WTO was factually accurate.
A Department for International Trade spokeswoman later said: “Our priority will be to get the best deal for Britain, and this includes allowing British companies to trade with the single market in goods and services.
“There will be a process of negotiation and it would be wrong to set out further unilateral positions in advance or speculate on what our future trading relationship will be with the EU,” she added.