Exclusive: The EU is 'deeply concerned' about Liam Fox's 'incompetent' handling of Brexit

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UK Prime MInister Theresa May and European Commission President Jean-Claude Juncker.

• The European Commission is worried about the UK government's "incompetent" lack of preparation for rolling over trade deals after Brexit.
• The Commission has told the rest of the EU it is concerned about "indecision" within the UK trade department over plans to roll over 40 free trade agreements.
• Brussels has singled out UK Trade Secretary Liam Fox, who is accused of failing "to grasp basic concepts and trade-offs" regarding Brexit.
• One former senior UK government official tells BI the trade department is way behind schedule and reluctant to accept the advice of experts.
• May's government insists that everything is going to plan.

LONDON - The European Commission is "deeply concerned" about the lack of preparation the UK International Trade Secretary Liam Fox has made towards carrying over Britain's existing free trade deals after Brexit.

One of the tasks facing Britain is to ensure the free trade deals it already has with other non-EU countries, as part of its EU membership, continue to apply after it has left.

However, the Commission - led by President Jean-Claude Juncker - has told the EU's other institutions it is worried about "the UK's incompetent handling of trade deal rollovers," and Fox's "failure to grasp basic concepts and trade-offs," a source who received the internal EU briefing told Business Insider.

Fox has previously said that all trade deals will be preserved in time for exit day.

"We're going to replicate the 40 EU free trade agreements that exist before we leave the European Union so we've got no disruption of trade," Fox said at the most recent Conservative Party conference.

However, the Commission is concerned that Britain is nowhere near ready, citing "indecision" within the Department for International Trade (DIT).

One former senior UK government official told BI they were not surprised the Commission was worried. "As it should be," they said. "Frankly, they've [DIT] been messing around for months and not doing any of this.

"Most of the people who are having to deal with this are totally ignoring reality."

The source added that "raging arguments" have been swirling around the department and the government as a whole over what the correct process is for rolling over the 40 free trade agreements the UK enjoys as an EU member.

They've started to get a slight grip this year but last year was completely wasted.

Some figures in Theresa May's government believe all 40 can be continued simply through a signed agreement between the UK and the EU.

However, others believe the trade deals will effectively need to be renegotiated, as many third countries will want the agreements to be tweaked and revised in their favour.

"In any negotiation, the other side is always going to want something," the official added.

"So when Fox says he wants to a carry a certain trade agreement over, the other side will list things it wants. That's what trade negotiators are trained to do. But they're in total denial about that. It's a shambles."

Some third countries have already objected to free trade agreements rolling over in their current form, the Brussels source told BI.

The UK government is wasting time

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Liam Fox

The DIT is also accused of being insular and unwilling to take the advice of experts outside Westminster. A leading UK business figure who works closely with the government told BI that "large swathes" of the department were "reluctant to accept the help of outsiders."

Both sources - who wish to remain anonymous - believe rolling over all 40 deals remains possible but is very unlikely, particularly if DIT continues to work like it has done since Prime Minister May set up the department.

"They've started to get a slight grip this year but last year was completely wasted," the source close to government said.

"Lots of time was spent inwardly looking at the text but no time spent actually going out and meeting the countries and discussing what needs to be done."

They added that some DIT officials had hoped the EU would "step in" to help with the process of carrying over free trade deals. "They [DIT] have never been on top of this," the source said. The EU delegation to the World Trade Organisation - which represents Brussels at the World Trade Organisation - refused to comment.

A government spokesperson denied that the DIT was unprepared for the challenges posed by Brexit, telling BI: "At the March European Council we agreed with the EU that the UK is to be treated as a Member State for the purposes of international agreements, including free trade agreements, during the implementation period.

"This approach has been welcomed by a number of third countries with whom we have international agreements through the EU, for the certainty it provides businesses and citizens. As the draft Withdrawal Agreement text states, the EU will notify other parties to the agreements in due course."

They added: "We will continue to engage with third countries both on this approach and to put in place arrangements to deliver continuity beyond the Implementation Period."

They're in total denial. It's a shambles.

Shadow Trade Secretary, Barry Gardiner, told BI that Labour's policy of staying in a customs union with the EU would protect Britain from disruption to its international trade relationships.

"The government is well aware of how difficult it will be to roll over 40 separate trade agreements," he said.

"That is why they've given themselves Henry VIII powers in the Trade Bill so that they can substantially change our laws and Treaties without Parliament being able to challenge them.

"This is why we have called for a new customs union that avoids any major disruption to trade between the UK and the EU and allows for these trade agreements with third countries to continue."

The European Commission did not wish to comment.