Although the UK wanted a post-Brexit trade deal with the European Union, Brussels had to understand that Britain was prepared to walk away without one, International Trade Secretary Liam Fox said on Thursday.

Britain goes to talks willing to accept ‘no deal’

Speaking ahead of a meeting with the World Trade Organisation (WTO) in Switzerland, Dr Fox told BBC Radio 4's Today programme, “We don't want to have 'no deal'. It is much better that we have a deal than no deal. We can, of course, survive with no deal and we have to go into a negotiation with those on the other side knowing that's what we think.“But of course we want to come to a full and comprehensive deal with the European Union. The only reason that we wouldn't come to a free and open agreement is because politics gets in the way of economics.”Dr Fox emphasised that Brexit involved leaving both the single market and customs union, despite calls from some of his own party's MPs for the UK to stay inside those arrangements as part of a transitional deal.“If we are to have an implementation phase between leaving the European Union and our final settlement, I don't have a problem with that,” he said. “But I do think we have to leave the EU first of all to keep faith with the voters who instructed us to do that. And you cannot leave the European Union and be in the single market or the customs union.”However, an academic think-tank, UK in a Changing Europe, warned in a report on Thursday that if the UK left the bloc without a trade deal, there would be “widespread, damaging and pervasive” consequences for the UK economy.

Brexit without a deal could be costly to the UK

The report, 'The Cost of No Deal', found that a Brexit without a deal was likely to trigger a further “significant” fall in the value of the pound, leading to a rise in inflation, a fall in wages and consumer demand, and a decline in business confidence and investment. There would also be “costly and time-consuming” burdens on businesses exporting to the EU, and “serious political and economic implications” for Northern IrelandThe think-tank's director, Prof Anand Menon of King's College London, said, “Our findings show a chaotic Brexit would, at least in the short-term, spawn a political mess, a legal morass and an economic disaster.“This report makes it clear 'no deal' is an outcome the British government must strive to avoid. 'No deal' doesn't mean the country would come to a stop. But even under relatively benign conditions and with time to prepare, the impacts would be widespread, damaging and pervasive.”

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Dr Fox travelled to Geneva to meet Roberto Azevedo, WTO director-general, to discuss the UK's post-Brexit arrangements and to deliver a speech calling for a rejection of protectionism. He said the UK would use its seat on the organisation – which it will take up after Brexit – to “shape the debate” on liberalising global trade.He also told WTO delegates that Britain wanted to see the agenda of global trade being shaped by the digital economy, by the use of trade promotion as the main tool of development, and by services.“As Britain leaves the European Union, as we take up an independent seat on the World Trade Organisation, we want our voice to be heard,” he told the BBC. “We need to think about new ways of getting the global economy moving.”He added that he believed that his previous discussions with the WTO indicated that “we will simply replicate our current obligations under the European Union as we move into the WTO as an independent member”.

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Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.

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For related news and features, visit our Brexit section.

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