Liam Fox is the Trade Secretary and was a prominent leave campaigner during the referendum. He famously claimed that doing a trade deal with the EU would be the easiest in history – this has proved to be wishful thinking. With the UK set to leave the EU in just 35 days, there is no withdrawal agreement in place, therefore no transitional period agreed and the UK will cease to benefit from the trade deals it enjoys with third party nations that have signed trade agreement with the EU’s member states.
Fox has said before that he expected all of the existing EU third party trade deals to be “rolled over” by the time that the UK leaves the bloc. However, it has been impossible to simply “cut and paste” these agreements (despite 30 months of notice) such that the UK will continue to benefit from them without lapse. Reasonably, some of the nations in question will be looking for more favourable trading conditions with a nation of approximately 66 million than they were prepared to agree to when trading with a block of about 512 million. It may also be relevant to these nations that the UK can no longer trade seamlessly with other EU states when considering their options.
The UK will be unable to benefit from the new EU-Japan trade deal, one of the most significant deals it hoped to “roll-over” by Brexit. Equally, the UK will no longer benefit from the EU’s custom with Turkey either.
Fox’s boast in 2017 was that the UK would continue to enjoy special 40 special EU third party trading relationships, however currently “continuity agreements2 have been finalised with just seven of 69 countries and regions: Switzerland, Chile, Israel, the Palestinian Authority, Eastern and Southern Africa and the Faroe Islands.
This means that unless the UK finalises a deal with the EU before Brexit date (which should allow it to continue to trade with third nations as if it was an EU state), businesses will have to trade under WTO rules which will impose tariffs on a range of goods which are currently either exempt or charged at a lower rate and bureaucratic measures are also set to increase.