No Australia-UK trade deal until at least 2022: UK Chancellor Philip Hammond

London: Britain’s Chancellor of the Exchequer Phillip Hammond has suggested the UK will not introduce any new bilateral trade deals until at least 2022, which will be seven years after Britain voted to leave the European Union. 

Prime Minister Malcolm Turnbull has said Australia will strike a deal “as soon as possible” with the UK once it leaves Brexit, but on Friday Mr Hammond said that might not be possible until 2022.

Brexit is ‘going to be great’: Johnson

British Foreign Secretary Boris Johnson said it was in their trading partners’ interests to keep trade as ‘frictionless’ as possible.

Speaking to the BBC’s Radio 4 Today programme, Mr Hammond said Britain would seek a transitional period of trading and free movement of labour with the EU for a period of no more than three years after the country leaves the EU.

“Nobody, literally nobody, wants this to go over cliff-edge in March 2019,” he said.

The Chancellor, who campaigned to stay in the EU and has been instrumental in getting Prime Minister Theresa May’s Cabinet to agree on a transition period, said there was broad consensus that the UK must completely leave the EU by the time of the general election in 2022. 

Mr Hammond confirmed Britain will leave the single market and customs union in March 2019, which would legally free the UK to negotiate trade deals. However he said the government could accept EU demands that Britain not implement any new trading agreements during the transitional period. 

“We recognise that it will take some time for us to negotiate trade deals with third countries,” he said.

“The important point is that we’re able to get started on that process and during a transition period where we would hope to have continued access to the European market it may be that during that period we don’t bring those new agreements into force, but it will take us time anyway, to negotiate them.”

International trade expert Shanker Singham, from the prominent British think tank The Legatum Institute, said the success of the UK’s trade policy hinged on its ability to free itself from the EU.

“​For the UK to have a viable independent trade policy, it must be able to negotiate and conclude trade deals, work in the WTO (World Trade Organisation) and improve its own environment on leaving the EU,” he said.

During his visit to Sydney this week, Foreign Secretary Boris Johnson said Australia would be “at or near the front of the queue” for a trade deal.

Britain is also keen to strike a deal with the United States, with Trade Secretary Liam Fox this week sent to the United States and Mexico to drum up support for trade agreements. 

Mr Hammond’s comments outlining the transitional period are the government’s clearest on the matter to date and come while Mrs May is on holidays. 

Labour MP Chuka Umunna, who opposes Brexit, said the government’s strategy was in chaos.

“The PM is hiking in Italy while Cabinet makes its own policy without her. Yet more Brexit chaos,” he tweeted.

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