Brexit on WTO terms would not be the end of the world: Fox

Saturday, 22 July 2017 00:09 - - {{hitsCtrl.values.hits}}

GENEVA (Reuters): Britain leaving the European Union without a new trade deal would not be the end of the world, although failing to keep existing open relationships could have global repercussions, Britain’s trade minister said in an interview on Thursday.

Sterling fell on Thursday on concerns about Brexit talks ending with no deal, which would leave Britain and the European Union trading on the basis of their agreements at the World Trade Organization (WTO), with no special access, an outcome many economists have warned could cripple business activity.

“People talk about the WTO (scenario) as if it would be the end of the world,” Liam Fox said. “But they forget that is how they currently trade with the United States, with China, with Japan, with India, with the Gulf, and our trading relationship is strong and healthy.

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“You can paint all sorts of negative scenarios and worst case scenarios. We’re aiming for a much better result than that,” he said.

Fears of a break in the trading relationship disrupting business and grounding planes were overdone “unless someone is suddenly suggesting that it would be advantageous for European airlines not to be able to fly to Heathrow”, he said.

He was speaking in Geneva at the WTO, where Britain is trying to disentangle its WTO membership terms from those of the EU. The aim is to replicate existing conditions as much as possible.

“If you introduce impediments to trade and investment in Europe that don’t exist today, it doesn’t exactly make Europe a beacon for open trade, and it’s likely to have ripples beyond the European continent in terms of the global economy,” he said.

With less than two years before the Brexit date of March 2019, Fox said it was impossible to say when businesses and farmers might get some idea of the transitional arrangements that could be in place on that date.

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There would be a process of implementation to avoid any “cliff edge”, he said, and potentially to bring in new customs and immigration procedures, which could take “a couple of years”.

Asked if the government could face dispute settlement cases from companies whose investments are damaged by Brexit, he said it was preparing for any eventuality.

“But again, the sort of market access that we would hope to reach would mean that they were not necessary.”