UK could suffer a 'loss of trade' with around 40 countries on Brexit day, admits Liam Fox’s chief civil servant

Countries with existing deals negotiated by EU will be 'trying to get something else extra', Trade Secretary's adviser acknowledges

The chief civil servant at Liam Fox’s department has acknowledged Britain could suffer a “loss of trade” with around 40 countries on Brexit day, with existing deals in doubt.

Agreements enjoyed because of EU membership may not be successfully rolled over, even if Theresa May strikes the two-year transition deal she is seeking, Antonia Romeo told MPs.

Asked if she feared Britain could suffer a “loss of trade” with those third countries, the permanent secretary of the Department for International Trade (DIT) replied: “We are working to ensure that we are not in that position.”

Crawford Falconer, the Trade Secretary’s chief negotiation advisor, also admitted those countries are likely to seek more favourable terms, in return for extending the trade deals.

“It is a terrible disease....they are always trying to get something else extra out of you,” he said, appearing before the Commons Public Accounts Committee.

However, Mr Falconer said the UK had made clear to the countries concerned that it was determined the outcome would be “maintaining status quo”.

“We are not in the business of opening a new negotiation going forward or going back. None of them can be, or are, in any doubt that that is our intention,” he added.

The comments were seized on by Peter Kyle, a Labour MP and supporter of the pro-EU Open Britain group, as undermining Theresa May’s “tired slogan of Global Britain”.

“With not much more than a year to go until the UK is due to leave the EU, we still have absolutely no idea whether we’ll be able to keep the global trade deals that we currently enjoy as an EU member state,” Mr Kyle said.

“As the Government’s chief trade negotiator Crawford Falconer confirmed, even if countries do agree to continue the deals, many are likely to seek adjustments to the terms in their favour because they know a Brexit-weakened UK will have no leverage whatsoever.”

Chile, Israel, Egypt, Mexico, Russia, South Korea, Switzerland and Turkey are among the third countries with which the UK currently enjoys trade deals – with Canada about to join them.

Last year, Lord Price, a former trade minister, claimed every country with an EU free-trade agreement had agreed to roll it over to apply to the UK after Brexit.

But the Government has since dropped that stance, instead maintaining that “all partner countries have agreed to work with us to ensure continuity”.

Separating agricultural quotas is believed to be a key controversy, some countries rejecting a plan by the EU and the UK to divide the allocations between them, after the UK’s departure.

It is thought that, unless a deal is reached to keep the UK fully covered by the agreements, Britain risks being bound by the obligations imposed - without enjoying any of the benefits.

The comments follow a report, by the Commons International Trade Committee, warning it was naive to assume that roll-over of the deals is “certain to occur”.

Mr Falconer, picked by Dr Fox as his adviser, also confirmed that attempts to strike fresh trade deals were “orientated” towards the United States, Australia and New Zealand.

He insisted such deals could be agreed within as little as 18 months if there was “absolute political buy-in” – rejecting claims they will take much longer.

Late on Wednesday, a DIT spokeswoman said: “Our permanent secretary was clear that we are working to meet the transition period deadline and ‘rolling over’ existing deals is a technical exercise not an opportunity to renegotiate terms.

“We have already held discussions with more than 70 countries and none have displayed any interest in disrupting trade flows, or in erecting barriers to trade that do not currently exist.”