Coronavirus will lead to a worldwide economic downturn somewhere between a “bad dream and worst nightmare”, former cabinet minister Liam Fox has warned.

The Conservative MP said many leaders have failed to grasp the expected economic fallout from the crisis.

Dr. Fox was speaking to BBC Newsnight as he made his case to become head of the World Trade Organization (WTO) in Geneva.

He also suggested that the UK could be granted a second Brexit transition phase.

Speaking at the WTO headquarters, the former international trade secretary indicated that the Geneva-based body could oversee another transition period if the UK and the EU agree a new trading relationship this year.

“We have what are known as differential treatments here which often allow countries who have a clear destination time to adapt to those changes,” Dr Fox told BBC Newsnight.

“I think that everything should be done by the rules and there are a number of precedents set here for transitions, there are a number of precedents set here for differential treatments. That is a matter for the officials here.”

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A transition, overseen by the WTO, would be different to the current Brexit transition. That involves full UK participation in the EU without a vote.

Dr. Fox indicated that a second transition could be used to allow a phasing in of new border arrangements between Britain and the EU which has been proposed by Michael Gove.

Liz Truss, the current international trade secretary, has warned that the Gove plan could leave the UK vulnerable to a WTO challenge on the grounds that EU imports to the UK would be treated more favorably than imports from elsewhere.

Economic implications

Prime Minister Boris Johnson nominated Dr Fox, a long-standing Brexit supporter, to be head of the WTO around an hour before the deadline earlier this month.

He is one of eight candidates hoping to succeed Roberto Azevedo, whose time in office was overshadowed by the effective freezing of the WTO’s dispute mechanism and trade skirmishes between the US and China.

Reuters

Dr. Fox believes calculations about global trade before the pandemic will have to change as the world deals with the downturn.

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He told BBC Newsnight, “We will not be in business as usual. I’m not sure people have actually grasped yet what a big impact the pandemic can have on the global economy and how that will shape thinking on the other side.

“It’s one thing to put forward a set of views if you think the global economy is going to be growing happily. It’s quite another to put forward the same prescriptions if you think that economy is going to be contracting.

“These are not going to be normal times. This is not business as usual… we must understand the potential scale of the problems we will face.”

Donald Trump

Dr. Fox has strong connections in Washington, particularly with the Republican Party.

But he indicated that he has little truck with President Donald Trump who has questioned the merit of multilateral organizations and has effectively paralyzed the WTO’s appellate court by refusing to endorse new appointments.

AFP

In contrast, the former international trade secretary said he strongly backed a rules-based international trade system.

He also indicated he has little time for Mr. Trump’s habit of upping trade tariffs as Dr. Fox deprecated protectionism.

“Protectionism comes at a price not least in security,” he said. “But economically if you protect your economy you may get a drop in prices in the short-term but you are likely to get a rise in prices in the longer-term as there is less competition in the system.”

Brexit and trade

Downing Street believes the nomination of Dr. Fox is an important sign of the freedoms enjoyed by Britain after Brexit.

Trade negotiations in the EU are conducted by the European Commission which means that it would be all but impossible for a member state to nominate a candidate to head the WTO unilaterally.

Britain has high hopes that the EU will not veto Dr. Fox. But there are fears that China may oppose his appointment as punishment for Britain’s decision to phase out Huawei’s involvement in the UK’s 5G network.

Ambassadors to WTO select the director-general by consensus. But the US, EU, China, India, and Brazil can each veto a candidate.

You can watch Newsnight on BBC Two at 22:30 on weekdays. Catch up on iPlayer, subscribe to the programme on YouTube, and follow it on Twitter.

Source:  https://www.bbc.com/news/uk-politics-53452120

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Leading Brexit supporters, meanwhile, warned the British government not to delay or water down the divorce from the 28-nation bloc. Foreign Secretary Boris Johnson said Prime Minister Theresa May must deliver the “full British Brexit” that voters were seeking.

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Britain voted 52 percent to 48 percent on June 23, 2016 to quit the EU, and its official exit is slated for March 29, 2019. But the country – and its Conservative government – remain divided about what kind of economic relationship it wants with the EU.

Opponents of Brexit, many waving EU flags, marched through central London to Parliament on Saturday, calling for a referendum on whatever divorce deal is agreed between Britain and the EU.

The crowd numbered in the tens of thousands, with organizers estimating 100,000 people took part. Police did not give an official estimate. A rival pro-Brexit march, demanding that the U.K. not compromise with the EU, drew a far smaller crowd.

The People’s Vote campaign, which organized the march, argues that public opinion is turning against Brexit as the economic costs become clearer.

It came as senior Cabinet ministers, including Liam Fox and David Davis, insisted the U.K. is prepared to walk away from talks without an agreement, BBC News reports.

The protest is part of a “summer of action” by campaign groups designed to increase pressure on May and Labour party leader Jeremy Corbyn.

James McGrory, one of the organizers, said voters were “made all kinds of promises” during the Brexit referendum.

“But two years later, all we’ve got are broken promises, an economy that’s already feeling the strain of Brexit and a government paralyzed by internal divisions,” he said.

Protester Matthew Mann, a Briton who is married to a French woman and lives in The Netherlands, said he was “here to show what a European looks like.”

“I have lived and worked across Europe – it’s home,” he said.

The leaders of both Britain’s Conservatives and the opposition Labour Party oppose holding another Brexit referendum, though many members of both parties disagree. Smaller parties, including the Greens and the centrist Liberal Democrats, support having a new Brexit vote.

“Brexit is not a done deal. Brexit is not inevitable. Brexit can be stopped,” Liberal Democrat leader Vince Cable told the crowd.

The government is determined to see Brexit through but May’s Cabinet is split over how to proceed, with Brexit-backing ministers such as Johnson calling for a clean break so that Britain can strike new trade deals around the world. Others, including Treasury chief Philip Hammond, want to keep closely aligned to the bloc, Britain’s biggest trading partner.

In an article for The Sun newspaper, Johnson said May must not deliver a “half-hearted” Brexit, which he likened to a roll of toilet paper – “soft, yielding and seemingly infinitely long.”

International Trade Secretary Liam Fox told the BBC the EU needs to understand that Britain is willing to walk away from the Brexit talks without agreement if necessary, because “no deal would be better than a bad deal.”

Amid the uncertainty, EU leaders are growing frustrated with what they see as a lack of firm proposals from the U.K about future relations. A paper setting out the U.K. government position on future relations, due to be published this month, has been delayed until July because the Cabinet cannot agree on a united stance.

Many businesses warn that a failure to reach a free-trade agreement between Britain and the EU would be an economic disaster. European plane-maker Airbus warned Friday that it could leave Britain – where it employs about 14,000 people – if the country exits the EU without an agreement on future trading relations.

Katherine Bennett, the company’s senior vice president in the U.K., said “a no-deal Brexit would be catastrophic.”

Source: https://www.cbsnews.com/news/anti-brexit-march-london-today-2018-06-23/

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Theresa May is under pressure to spell out her vision for the UK’s future trading relations after a new cabinet split emerged on whether the country should remain part of a customs union with the EU.

The prime minister did not rule out such an arrangement, which would limit Britain’s ability to reach free trade agreements with non-EU countries, but failed to say what she thought should happen.

She is facing calls to clarify the government’s position after the Financial Times reported on Friday that the chancellor, Philip Hammond, and the business secretary, Greg Clark, favoured staying in a customs union for goods.

The international trade secretary, Liam Fox, was quick to slap down the idea, saying the government was not considering such an arrangement with the EU. He insisted it would restrict the UK in forging new trade deals with the rest of the world.

His comments poured cold water on reports that the government was considering a deal under which trade in goods would be covered by a customs union arrangement, while the UK would retain independent policy on services.

Speaking to Bloomberg TV in China on the final day of the prime minister’s three-day visit, Fox said being part of a customs union would prevent Britain from setting trade regulation.

“It is very difficult to see how being in a customs union is compatible with having an independent trade policy, because we would therefore be dependent on what the EU negotiated in terms of its trading policies, and we’d be following behind that,” he said.

Asked if he was ruling out any form of customs union in future, Fox said: “We have to be outside of that to take advantage of those growing markets. One of the reasons we are leaving the European Union is to take control and that’s not possible with a common external tariff.”

May was more vague about the government’s intention.

“What I want to do is ensure that we have got the best possible trade arrangements with China and with other countries around the world once we have left the European Union,” she told Sky News on Friday.

“I do want to do those free trade agreements. There is more trade that we can do even before we get to those free trade agreements.”

Fox said the Chinese were impressed with May’s visit and it should silence her backbench critics. “Theresa May’s middle name is resilience,” he told Bloomberg.

“And that’s exactly what she’s showing and I do wish more people could have seen the commitment she was showing to Britain’s national interest on this trip to China.”

May also avoided questions about her future. Asked by Sky News whether she planned to deliver her vision of Brexit into the next election, she said: “That’s what I’m doing here in China. I’m getting on with delivering on exactly what the British people want us to do.”

In an interview with the BBC, May repeated her assertion that she was not a quitter, but pointedly used the past and present tense in relation to her role as prime minister, not the future tense.

In answer to the question: “Do you want to be the Tory leader at the next general election?” she replied: “I’ve been asked this question on a number of occasions. I’ve said very clearly throughout my political career: I’ve served my country and I’ve served my party. I’m not a quitter.

“I’m in this because there is a job to be done here, and that’s delivering for the British people and doing that in a way that ensures the future prosperity of our country.”

Source: https://www.theguardian.com/politics/2018/feb/02/liam-fox-no-customs-union-eu-brexit

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