Liam Fox has brazenly told EU leaders the “ball is in their court” over the Chequers Brexit plan and threatened of the catastrophic damage a “no-deal” situation could do to their economies.
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Breaking a lengthy silence, the international trade secretary 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.
The comments come despite repeated warnings from economists that the biggest economic loser of breaking ties with its closest trading partner would be the UK itself. An analysis of official forecasts earlier this year showed the British economy would suffer a £252bn hit in the event of a no-deal Brexit.
The disgraced former defence secretary also suggested that tariffs on imports of American cars could be slashed to secure an agreement with Donald Trump’s America.
In a stark message to the leaders of EU nations – which have so far remained steadfastly 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.
The attempt to show the government’s negotiating strength over Brexit comes the day after prime minister Theresa May was forced to threaten her own MPs with a general election if they defeated her plans on customs.
Dr Fox said: “We have made an offer to the EU27. The ball is now in their court.
“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,” he warned.
That was why the EU needed what he called a “people’s Brexit, not a bureaucrats’ Brexit”, he said, where the economic prosperity of citizens was placed above 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.”
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, would cover potential deals with the US, Australia and New Zealand, he said. The latter two countries have a combined population less than 10m that of Poland.
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.”