UK Acknowledges Key Trade Deals Won't Be Ready by Brexit Day

The British government acknowledged Thursday that trade deals with major countries such as Japan and Turkey will not be in place by the planned Brexit day of March 29, while the European Union’s chief said he remains downbeat about Britain avoiding a chaotic departure from the bloc.

Britain’s international trade secretary, Liam Fox, claimed in 2017 that by the day the U.K. left the EU, the country would be in a position to continue the trade deals with 70 other nations it has as an EU member.

But only a handful of the deals have been finalized, including one with the tiny Faroe Islands.

As for the rest, Britain’s Department for International Trade said Thursday “it remains our priority to conclude trade continuity agreements with these countries by exit day or as soon as possible thereafter.”

The most significant of the pending deals is with Japan. A Japan-EU free-trade agreement took effect at the beginning of February, removing hundreds of millions of euros (dollars) in duties paid by EU exporters to the Asian nation.

A proposed U.K.-EU divorce agreement includes a 21-month transition phase that would keep Britain operating under EU rules while the government works out future trade arrangements.

Britain’s Parliament has rejected the deal, and the government has failed to win concessions from the EU that lawmakers demanded.

EU Commission President Jean-Claude Juncker said Thursday that despite constructive talks with British Prime Minister Theresa May on Wednesday night, he doesn’t have much hope a divorce agreement will be in place by March 29.

A no-deal Brexit “will have terrible economic and social consequences both in Britain and on the continent,” Juncker said at a EU conference, adding he was doing his utmost so “the worst can be avoided.”

But he said, “I am not very optimistic when it comes to this issue.”

Without a deal, British businesses will face tariffs and other barriers to trade with both the EU and third countries. May and Juncker said after their meeting that negotiators would urgently seek a way to prevent Britain from withdrawing out of the Brexit quagmire to prevent Britain from withdrawing without a smooth transition.

The Confederation of British Industry said the government must rule out a “no-deal” Brexit.

“Many companies are unaware it is not just their relationships with EU customers at risk from a no-deal Brexit, but those across the globe,” said the group’s director of international trade and investment, Ben Digby.

“Individual businesses trading with markets outside the EU would face tariffs worth millions of pounds being slapped on them instantaneously.”