Liam Fox warns UK cannot be ‘blackmailed’ over Brexit bill

The UK’s international trade secretary warned on Friday that Britain could not be “blackmailed” into paying a price to leave the EU and said there was “frustration” the Brexit talks were “stuck” on “this separation issue”.

Speaking in Tokyo, Liam Fox, responding to EU negotiators’ public irritation over the slow progress of Brexit talks in Brussels, said the negotiations risked sending a signal to the wider world that Europe was “no longer open for business”.

Mr Fox, who has been accompanying Prime Minister Theresa May on a visit to Japan aimed at showcasing the UK’s ability to strike post-Brexit trade deals, belongs to the minority of cabinet ministers who campaigned to leave the EU in last year’s referendum.

He has since been seen as one of the ministers most in favour of a “hard Brexit” clean break with European institutions, although the cabinet has broadly coalesced around a transition period to smooth the UK’s path out of the 28-nation bloc.

His comments highlight the growing tensions between the UK government and European Commission negotiators over the halting progress in the divorce negotiations.

At the centre of the dispute is the so-called “exit bill”, which Brussels wants to settle before moving into talks about a future trading relationship. At the end of a third round of talks on Thursday, Michel Barnier, the EU’s chief negotiator, accused the UK of reneging on financial commitments made while it was an EU member, including for development aid to Ukraine and Africa.

“After this week, it is clear that the UK does not feel legally obliged to honour these obligations after its departure,” Mr Barnier said at a news conference with David Davis, the UK Brexit secretary, at the end of the third round.

Asked by ITV News before leaving Japan about the hold-up in Brexit talks over the UK’s reluctance to outline what it will pay in a “divorce settlement”, Mr Fox said: “We can’t be blackmailed into paying a price.”

A breakdown could have near-term consequences. The talks were due to move into areas favoured by the UK — including hammering out a post-Brexit bilateral trade deal — in October. But without agreement on the exit bill, the European Commission looks set to recommend against moving the discussions on to the future relationship.

“We think we should begin discussions on the final settlement because that’s good for business, and it’s good for the prosperity both of the British people and of the rest of the people of the European Union,” Mr Fox said, echoing the view of the UK government.

In a separate interview with Sky News, Mr Fox said London has become increasingly frustrated with Mr Barnier’s unwillingness to move the talks on to the future relationship between Britain and the EU.

“I think there is frustration that we have not been able to get on that longer-term issue, that we’re stuck on this separation issue and we’re not able to get on to the issues that will matter in the longer term for the future prosperity of the UK and the people of Europe,” he said.

The trade secretary said he had received “representations” from across Europe — including Germany and Spain — asking for more pressure to be put on the European Commission to say what the “final picture” of the future relationship between the UK and EU would look like, because of the need to maintain an “open and liberal trading environment” in Europe.

EU officials, however, maintain their hardline on the Brexit bill reflects the position of member states, particularly France and Germany. On Thursday, Mr Macron gave a full-throated endorsement of Mr Barnier and his negotiating tactics. “There is only one negotiator and only one mandate,” Mr Macron said at a news conference.

Mr Fox warned that failing to reach a comprehensive trade deal would send a dangerous message to other non-EU members seeking to invest in Europe.

“To introduce impediments to trade or investment that don’t exist today would actually send up a signal to the rest of the world — for example to investors here in Japan — that Europe is no longer open for business,” he said.

Mr Fox was in Japan as part of his efforts to persuade foreign governments to conclude trade deals with the UK quickly after Brexit. The UK won a commitment from Japan to move quickly to a new deal, but the commitment included a caveat that Japan’s immediate priority was to finalise its deal with the EU, agreed in principle in July.

Carolyn Fairbairn, director-general of the CBI, a member of the business delegation that accompanied Mr Fox, said the visit had been a “good, positive and warm” one, despite worries over the UK’s future trade relationships.

“Japanese businesses are understandably concerned about Brexit but the conversation was about practical, commonsense solutions that business and government are seeking to find,” Ms Fairbairn said.

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