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3 October 2017

The problem with Liam Fox’s speech: hope isn’t a Brexit strategy

The International Trade Secretary's insistence that Britain merely needs more “optimism” is at odds with economic reality. 

By George Eaton

Liam Fox wasted no time in making the target of his speech clear: “the Remoaners”. “OK. It’s time for some optimism,” the International Trade Secretary declared at the outset of his Conservative conference address. He continued: “When people ask if I’m a glass half full or half empty man – I just tell them that I’m Scottish and the glass isn’t big enough.”

But what justified such optimism? Investment, Fox boasted, was surging “despite Brexit”. Yet the reality, as Chancellor Philip Hammond noted yesterday, is a “drip drip of lost investment” – not in spite of Brexit but because of it.

What of the new trade deals that Fox’s department was established to strike? Though he proudly stated that the UK would leave the customs union in March 2019, Fox omitted to mention the awkward truth: he won’t be able to sign fresh agreements until at least 2021. The Trade Secretary was left to hail the establishment of “12 working groups” and the mere possibility of new deals, rather than the reality. 

Fox, predictably, spoke only of the benefits that would accrue to Brexit Britain, rather than the costs. “We need to stop the negative, undermining, self-defeating pessimism that is too prevalent in certain quarters and be bold, be brave and rise to the global challenges, together.”

But Britain’s inexperience of trade negotiations (the preserve of Europe for 44 years) and its desperate need for new deals (as it leaves the destination of 44 per cent of its exports) means it starts from a position of unambiguous weakness.

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As Donald Trump (who the Atlanticist Fox presumably thought it unwise to mention) has said, the US wants an “all-in” trade deal, including agriculture and services. The prospect of chlorine-washed chicken entering the UK has already split the cabinet (with Environment Secretary Michael Gove vowing to block it) and hormone-injected beef and acid-washed pork would likely fare no better. Were Britain to adopt US standards, it would undermine continued trade with the EU: there is no cost-free option. 

But Fox maintained that only a lack of optimism held the UK back. “As we leave the European Union, and take up our independent seat at the World Trade Organisation,” he vowed, “we will be unequivocal champions of free trade for the benefit of all.”

Why a UK of 65 million people would hold greater leverage than the EU (445 million people), Fox did not say. The reality remains that a supposed “champion” of free trade is tearing itself from the world’s largest single market. 

“We are not passengers in our own destiny,” Fox declared in his peroration. “We can make change happen if we want to.” That is true enough, but his insistence that it is change for the better rests only on wishful thinking.