Liam Fox's Commitment to Free Trade Welcomed by Businesses but Uncertainty Still Lingers

International Trade Secretary Liam Fox has suggested the UK will be an independent member of the World Trade Organisation and therefore external to the EU’s single market.

Speaking to an audience in Manchester, Fox said the UK would seek to establish an independent position within the WTO post-Brexit and that the country, "has a golden opportunity to forge a new role for ourselves in the world, one which puts the British people first."

Some commentators have suggested the reference to seeking full WTO membership as a sign the Government may be seeking a ‘hard brexit’ which has come to be loosely defined as an exit from the European Union AND the single market.

An exit from the single market would be the price that must be paid for seizing back control of the UK’s borders from Europe who insist unfettered access to the single market requires sharing common border policies.

It also allows the UK more freedom in negotiating trade deals with other countries wheras membership of the single market would hamper the country's ability to do so.

Nevertheless, not being part of the single market does not necessarily imply the UK cannot have a free trade agreement with the European Union and keep control of its borders.

One only needs to look to South Korea as an example of a country with a free trade agreement with the EU while not being tied to the freedom of movement principle.

Fox’s speech can best be described as being a rallying cry for global free trade, and he appears determined in forwarding the global free trade movement.

This has been welcomed by sections of UK business.

“Today’s speech from the International Trade Secretary Liam Fox will be welcome news for those in the business community who have been calling for direction from the government on Brexit,” says Paresh Davdra at RationalFX, the international payments provider.

Davdra believes, despite the difficulties and criticisms the government has faced in the months since the referendum vote, Fox has today outlined a clear vision for the future of the UK’s trade.

“Fox’s view that Brexit is a ‘golden opportunity’ for the UK is consistent with the positive outlook of the BoE, suggesting that more clarity over the form that Brexit will take is emerging in government,” says Davdra.

Fox’s rallying cry to free trade can also be considered a warning shot to the European Union to not unnecessarily impose trade barriers on Britain while at the same time making much of their progressive trade agreements with the rest of the world.

100 Days on, and State of Limbo Exists

Despite the recent comments by Fox, the uncertainty weighing on UK businesses remains notable.

"British businesses have seen little to no advantages from Britain’s decision to leave the EU one hundred days on. There have been no further developments especially in relation to trade and tax and how British businesses will be affected by the referendum result,” says Ed Molyneux, co-founder of FreeAgent, the cloud accounting software providers.

In particular, Molyneux says micro-businesses and SMEs, which make up 95% of UK businesses, are actually in a state of limbo due to a lack of clarity on these issues, and are hunkering down for a lengthy period of uncertainty while negotiations take place over the terms of the UK’s exit.”

“I would urge the government to be as swift as possible in providing updates about how these discussions are progressing, and give every business owners in the UK clear, up-to-date information about what the effects of Brexit, whenever it does happen, will be on important issues such as trade and tax. British micro-businesses cannot be kept in the dark, given their immense contribution to the economy,” says Molyneux.