Where are all the post-Brexit trade deals?
Liam Fox promised up to 40 trade deals by 29 March 2019 but so far they have failed to materialise
The UK has agreed its first post-Brexit free trade deal in principle, amid fears that the country could crash out of the European Union without replicating any of its existing trade agreements.
International Trade Secretary Liam Fox shook hands with Israel’s Economy Minister Eli Cohen on the future deal at Davos yesterday.
It comes as Fox has been “under scrutiny for failing to reach any free trade agreements ahead of Brexit as the risk of a no-deal departure looms amid a divided parliament”, says City A.M.
“The government is seeking continuity of existing EU free trade agreements, which will not apply to the UK if it leaves with no deal at the end of March,” says the newspaper.
Fox previously promised that as many as 40 trade deals would be ready to go by 29 March, when the UK is due to leave the EU.
According to an internal Whitehall memorandum leaked last week, the UK will not be close to finalising most of the trade deals needed to replace the EU’s 40 existing agreements with leading global economies.
The Financial Times reports that the memo, “compiled by civil servants as part of contingency planning for the UK crashing out of the EU without a formal Brussels divorce agreement, warned that most of the deals would lapse without a transition period that keeps Britain under the EU umbrella once Brexit occurs”.
The newspaper says “countries covered by EU trade agreements account for about 11% of current UK trade, of which 70% is with just four countries: Norway, Switzerland, South Korea and Turkey”. They also include EU bilateral trade agreements signed with large G7 economies such as Canada and Japan.
Combined with existing trade to the EU, Britain’s biggest trading partner by far, these account for around 60% of all UK trade.
Reuters reports that “the British government has since signed agreements with Australia and New Zealand” – although neither one mirrors the existing trade deals with the EU.
“The closest the UK has come to rolling over a free trade deal is an initial agreement with Switzerland to replicate the existing EU-Switzerland arrangements ‘as far as possible’, but that deal has not been formally signed yet,” said the BBC last Friday, before the agreement with Israel.
Speaking on BBC Radio 4’s Today programme, Business Minister Richard Harrington blasted what he called the “sham of pretend trade agreements” and said a no-deal Brexit would be a “disaster”.
Threatening to quit his post if the government pursued a no-deal Brexit, Harrington said he was not prepared to “sell business down the river for other people's political dogma”.
It follows an open letter published in The Guardian last week in which 11 business representatives urged “MPs and lords to support amendments that ensure democratic oversight of post-Brexit trade deals” in order to “ensure the UK’s future trading relations deliver in the public interest”.
Fox said he would use his two-day visit at the World Economic Forum in Davos to “finalise continuity trade agreements to ensure our exporters do not face disruption as we prepare to leave to the EU”. He is expected to meet trade ministers from South Korea, Hong Kong, Canada and Colombia.
But he has said that some deals would not be in place by March because trade partners were underestimating the chance of a no-deal Brexit.
“We’re ready and we’ve put all our proposals forward,” he told the BBC Andrew Marr Show on Sunday. “A number of countries... are unwilling to put the preparations in for no deal.”
It is a far cry from claims he made shortly after the Article 50 exit process was triggered, when he said: “We’re going to replicate the 40 EU free trade agreements that exist before we leave the European Union so we’ve got no disruption of trade. Believe me, we’ll have up to 40 ready for one second after midnight in March 2019.”
As recently as last November, Trade Minister George Hollingbery told MPs that the UK would “roll over” the majority of the EU’s trade agreements in time for a no-deal Brexit.
“That happening is very much open to question,” says James Moore in The Independent. “The Davos jaunt, we are told, is part of the ‘drive to get deals over the line in the run-up to Brexit’... But all this is in the absence of any final agreement with the UK’s biggest trading partner: Europe.”
Agreeing even the framework of that deal has proved near impossible since Article 50 was triggered, despite claims by Fox during the referendum that it would be the “one of the easiest in human history”.