UK faces barriers to trade deals with non-EU countries post-Brexit

Britain may not be able to strike trade deals with countries outside the European Union, including those in the GCC, for three years after the UK’s departure from the EU bloc.

The news comes after British chancellor Philip Hammond won a cabinet battle for customs agreements to stay in place for an interim period.

Mr Hammond outlined plans for introducing a “temporary customs union” in a government position paper yesterday, which is designed to allow businesses to move goods across the border with other EU states without filling in additional paperwork.

Under the customs union as it stands, companies in the EU exchange products without tariff charges and must impose the same tariff charges on nations outside the union.

The agreement outlined by Mr Hammond, which must be signed off by the EU’s other 27 member states, would leave the rules of the customs union in place for up to three years and, a lawyer said, will mean the UK is unable to make trade deals with countries outside the bloc during this time.

Aline Doussin, a partner at international law firm Squire Patton Boggs, said the news had been welcomed by many of her clients who were anxious about the prospect of Britain leaving the bloc without any kind of European trade deal being made.

But Ms Doussin said that making trade deals with nonEU states would be impossible during a transitional period.

“From a legal point of view, it is impossible that the UK will be able to bring into effect any trade deals with third countries during the interim period, such as those included in the GCC,” she said.

Mr Hammond’s plan will be a blow to many in the Conservative Party, including trade secretary Liam Fox, who had hoped to sign deals with nonEU countries as soon as Britain leaves the bloc in March 2019.

The British government’s latest move would need to be approved by the remaining 27 nations of the European Union