Background Briefing: Liam Fox Bloomberg Speech


On Tuesday 27 February, the International Trade Secretary, Liam Fox, delivered a speech at Bloomberg in London on Britain’s future treading relationship post-Brexit. The speech, which can be found here, fell short in the following areas:

  • He failed to acknowledge that leaving the Single Market and Customs Union will, by necessity, add friction to the UK’s trade with the EU, our largest trading partner.
  • He failed to provide any solutions to the challenge of avoiding a border on the island of Ireland.
  • He offered no reassurance that new trade deals will compensate for the lost trade from leaving the Single Market and Customs Union.
  • He claimed staying in a Customs Union with the EU would be “a complete sell out of Britain’s national interests”, yet only a few years ago he advocated doing exactly that.
  • He falsely alleged that the current EU trade policy (of which the UK is a member) has hindered developing countries from making economic advances.

This was yet another speech that failed to address any of the difficult questions posed by Brexit or to acknowledge the serious damage that leaving the Single Market and Customs Union will do to our economy. With only 13 months to go until the UK leaves the EU, with uncertainty becoming ever more apparent, everybody has the right to reconsider if Brexit is the right path for the UK to be on.  


New and improved trade deals post-Brexit

What Liam Fox said:

“We have opened 14 informal trade dialogues with 21 countries from the United States to Australia to the UAE and these will lay the groundwork for future trade agreements.”[1] Liam Fox, 27 February 2018



  • Ministers have previously claimed we will have dozens of free trade deals ready on the day we leave the EU. That clearly is not going to happen.
  • Liam Fox has claimed he will have 40 trade deals ready to sign “the second after” Brexit.[2]
  • David Davis promised in July 2016 that “So within two years, before the negotiation with the EU is likely to be complete…we can negotiate a free trade area massively larger than the EU.”[3]
  • Some countries, with whom the UK already has trade deals, due to its membership of the EU, have already indicated that they would like to renegotiate terms. [4]
  • In September, the Trade Secretary himself admitted that the UK does not currently have the capacity to negotiate free trade deals: “We are simply unable to do that at the moment.”[5]


Trade with non-EU countries will make up for loss of free trade with the EU

What Liam Fox said:

“The UK is perfectly placed to power with the economic power-houses of the future and they in turn are eager for the benefits such a mutual partnership would bring. To do this we need to exercise a fully independent trade policy.”[6] Liam Fox, 27 February 2018



  • The recently leaked analysis produced by the Government concluded that new trade deals won’t even close to compensating for the costs of leaving the Single Market and Customs Union.
  • It found that a trade deal with the US would benefit GDP by about 0.2% in the long term. Trade deals with other non-EU countries and blocs, such as China, India, Australia, the Gulf countries, and the nations of Southeast Asia would add, in total, a further 0.1% to 0.4% to GDP over the long term.[7]
  • Today, Sir Martin Donnelly, former Permanent Secretary at the Department for International Trade, said it is like “giving up a three-course meal for the promise of a packet of crisps.” [8]


Free and frictionless trade with the EU

What Liam Fox said:

“[W]e want to develop customs arrangements which lead to trade being as frictionless as possible at our borders in a tariff-free environment with as few non-tariff barriers as possible.”[9] Liam Fox, 27 February 2018



  • The Secretary of State is naïve to believe that it is possible to have free and frictionless trade with the EU outside of the Single market and Customs Union.
  • Being outside the Single Market and Customs Union will lead to friction in UK-EU trade.
  • All third countries have a degree of friction in their trade with the EU, including Switzerland and Norway, neither of which is in the Customs Union as well as Turkey, which is not in the Single Market.
  • As Martin Donnelly said today: “[It would require a fairy godmother to achieve a free and frictionless trade deal with the EU] because in the services sector, you’re talking about the rules that everybody has to follow.”[10]
  • Michel Barnier has also been clear: “The only thing I can say now is that without a customs union - and being outside the Single Market - barriers to trade and goods and services are unavoidable.”[11]


The UK-Republic of Ireland land border:

What Liam Fox said:

“The avoidance of a hard border in Northern Ireland is of crucial importance as is the prevention of trade barriers between Northern Ireland and Great Britain. We believe that a comprehensive and liberal trading agreement with the EU is the best way to deal with the crucially important issue of avoiding that hard border.”[12] Liam Fox, 27 February 2018



  • Like his colleagues Boris Johnson and David Davis, Liam Fox chose to give a speech on Brexit without providing any ideas or solutions to the Norther Ireland question.
  • As has been spelled out by Michel Barnier, any kind of divergence from existing EU rules and regulations will make a hard border between the UK and the Republic of Ireland inevitable and diverging from existing EU rules is precisely what the Government is trying to do.
  • He has made clear that “the decision to leave the Single Market and the Customs Union would make border checks unavoidable.”[13]


EU trade policy hurts the developing world

What Liam Fox said:

“And then there is the question of our ability to help developing countries in the way that we would like. Outside the Customs Union we will be able to tackle barriers to trade to enable poorer countries genuinely to trade their way out of poverty.”[14] Liam Fox, 27 February 2018



  • The European Union offers developing countries lower tariffs on their exports into the EU through its ‘Generalised System of Preferences’.[15]
  • In particular, the EU’s Everything But Arms scheme grants full duty-free and quota-free access to the EU Single Market for all products except arms and armaments, to all countries that are listed as a Least Developed Country (LDC) by the United Nations.[16]
  • Far from imposing large tariffs against the world’s poorest countries, the EU has in fact done the opposite.


Being in the Customs Union would damage UK trade

What Liam Fox said:

“First of all, for goods, we would have to accept EU trade rules without any say in how they were made, handing Brussels considerable control of the UK’s external trade policy. Secondly, it would limit our ability to reach new trade agreements with the world’s fastest-growing economies. And thirdly, it would limit our ability to develop our trade and development policies that would offer new ways for the world’s poorest nations to trade their way out of poverty.”[17] Liam Fox, International Trade Secretary, 27 February 2018 


What he said in 2012:

  • Liam Fox has changed his tune. He previously advocated maintaining “a customs union” with the EU.
  • In 2012 he wrote: “What should be done? I believe that the best way forward is for Britain to renegotiate a new relationship with the European Union – one based on an economic partnership involving a customs union and a single market in goods and services.”[18]