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Brexit deal should not 'drag on' until after next election, says Liam Fox

Liam Fox
Liam Fox said he believed the government would conclude the transitional period by 2022 because the cabinet would ‘want to get it out of the way before the election’. Photograph: Pierre Albouy/Reuters

Liam Fox has conceded Britain is likely to seek a transitional deal until 2022 after leaving the European Union, but said the arrangements should not “drag on” until after the next general election.

The international trade secretary has previously said interim arrangements for trade, customs and immigrations should last no longer than “a few months” but said Brexiteers in the cabinet were now prepared for a longer transition.

Last week, senior cabinet sources suggested the government was united in its need to seek an “off-the-shelf” transitional arrangement, in which Britain would likely remain in the single market and retain free movement for at least two years after the UK formally leaves the EU in March 2019.

It comes as Fox prepares for his first formal meeting to lay the groundwork for the UK-US trade deal, though nothing can be formally agreed before the UK exits the EU in 2019, or potentially longer if transitional arrangements preclude signing new trade arrangements. The meeting of the UK-US working group will “provide the mechanism for preparing the ground for a potential free trade agreement,” the department said.

Speaking from Washington, Fox said a transitional arrangement would be a practical issue. “We will look to see what we are going to do in terms of making that a smooth transition for our businesses, to give them maximum certainty and to cause minimal disruption,” he told BBC1’s Andrew Marr Show.

“Frankly, having waited for over 40 years to leave the European Union, 24 months would be a rounding area, whether that’s 23, whether that’s 25 is not a huge deal and nor is it an ideological one. It’s about the practical issues we would face about getting, for example, any new immigration system into place, getting any new customs system into place.”

The trade secretary said there were still differences within the cabinet about what precisely a transitional arrangement should entail, especially the effect it would have on his own department. “Would we be able to negotiate our own trade agreements during that transition period? Because if we were not, then we wouldn’t be able to take full advantage of the freedoms available to us when we leave the European Union,” he said.

“So there’s still a discussion to be had, but I don’t think that there’s any great ideological blockage on the concept of a transition or an implementation period as I would rather put it.”

Fox’s comments are understood to reflect No 10’s thinking on a transition period. “An implementation period and the detail of that is a matter for the negotiations but clearly the ability to start negotiating trade deals after March 2019 is something we would want,” a Downing Street source said.

Fox said he believed the government would conclude the transitional period by 2022 because the cabinet would “want to get it out of the way before the election ... I don’t think people would want to have it dragging on.”

Both the chancellor, Philip Hammond, and the business secretary, Greg Clark, are staunch proponents of a transitional deal that retains the current trading arrangement with the EU, warning of the dangers of a cliff edge for businesses.

Fox has previously clashed with Hammond over whether the UK should be prioritising seeking free trade deals, with the chancellor saying such deals would have limited benefit for the UK. “Much of our trade with the world is service trade, where free trade agreements won’t make any particular difference,” the chancellor said at the G20 in Hamburg earlier this month.

Fox aimed a thinly veiled barb at the chancellor’s comments in a piece in the Sunday Times this week.

“Having the world’s largest economy publicly show commitment to increasing trade with us is not something we should sneer at,” he said, referring to Donald Trump’s positive comments about a quick trade deal with the UK post-Brexit.

Fox will meet Trump’s trade representative, Robert Lighthizer, in Washington to kick off two-day talks this week, which DIT said would “explore ways to strengthen our trade and commercial ties ahead of exit, consistent with our EU membership obligations”. He will also host a breakfast with members of Congress, meet the commerce secretary, Wilbur Ross, and travel to Houston to hold meetings with representatives from the chemical, oil and gas sectors.

The UK is likely to face significant barriers to a trade agreement, given the US has long pushed a general dilution of health and environment regulation. Hormone-treated beef and poultry processed with chlorine are two common symbols used by activists of of lower US food safety standards.

The environment secretary, Michael Gove, insisted on Friday that the UK should not take part in a “race to the bottom” to win new trading relationships. “Of course it’s important we explore new trading opportunities, with the United States and other nations across the world, but it must not be, and the cabinet is agreed on this, at the risk of dropping any environmental standards whatsoever,” he said.

Free market thinktank the Adam Smith Institute warned in a report published overnight that access to the US poultry market was likely to be a key sticking point in thrashing out an agreement with the US. The ASI said the UK should be prepared to adapt its standards, pointing to an assessment by the European Food Safety Authority that the chemical rinses, including chlorine dioxide, were safe to eat.

“Agreeing to US poultry imports would help to secure a quick US trade deal, and bring down costs for British households,” the report says. “European opposition to US agricultural exports has held up trade talks for years. By scrapping the ban on chlorinated chicken imports, the government will send a signal to potential trading partners across the globe that the UK remains an open-facing and free trading nation.”

EU guidance suggests washing chickens in chlorine could lead to worsening of standards in abattoirs, who would rely on the chlorine as a decontaminant and that the chemical washes could be used by unscrupulous producers to make meat appear fresher that it was.

No 10 stressed that finer details such as poultry exports were likely to come in the later stages of formal trade negotiations, but said the government was clear that food safety standards would not be compromised or relaxed.

After leaving Washington, Fox will launch the second of his summer trade offensives with a visit to Mexico to meet economy minister Ildefonso Guajardo.