MPs’ opposition to a no-deal Brexit has hindered UK efforts to replicate an EU trade deal with Canada, says International Trade Secretary Liam Fox.
On Monday, Buzzfeed News reported that Canada was refusing to extend its existing deal with the EU to the UK if there is no Brexit agreement.
Mr Fox said “mixed signals” from Parliament had made it “very difficult” for ministers during talks.
But Labour said Mr Fox had been “stubborn and ideological”.
The EU’s deal with Canada, known as the Comprehensive Economic and Trade Agreement (Ceta) has been in force provisionally since September 2017.
Some 98% of all tariffs on goods traded between Canada and the EU have become duty free since then.
The UK hoped Canada would agree to “roll over” Ceta in the event of no deal in order to maintain continuity, but it appears those efforts have stalled.
Many MPs, including the chancellor, have insisted they will do everything possible to stop the UK leaving without a deal on 31 October, although both men vying to be the next prime minister say they would be prepared to accept it.
“Countries were negotiating with us on the basis that there would be potential of a no-deal exit,” Mr Fox told MPs on the International Trade Committee on Wednesday.
He continued: “The progress was very advanced; in fact we reckoned above 99% of agreement.
“[But] the signals coming from our Parliament were conflicting.
“If Parliament continues to be inconsistent, it’s very difficult for the government to maintain a consistent position in terms of negotiations.”
He also said government plans to cut tariffs in the event of a no deal had made the Canadians think they would benefit if Ceta were not rolled over.
Around 87% of imports by value would be eligible for zero-tariff access under the temporary scheme.
But the international trade secretary said not agreeing to permanent post-Brexit arrangements would put Canadian exports at risk.
“My advice is still to the Canadian government to seek to make an agreement which covers us in all circumstances”, he added.
‘Impossible to compete’
Shadow international trade secretary Barry Gardiner said Canada would be at a “significant advantage” if the Ceta deal were not rolled over.
“The government’s foolish approach will ensure that they do not have to offer trade preferences in return”, he said.
“A no-deal Brexit means that our exporters face being shut out of core markets or having huge tariffs levied on their goods whilst importers into our market will not.
“Quite simply, it will be impossible to compete.”
Cetais one of around 40 trade deals the UK is currently a part of due to its EU membership, which covers trade with more than 70 countries around the world.
The UK has so far agreed “continuity” deals with 11 countries and regions to maintain existing trade arrangements as far as possible after leaving the EU.
Last month it also signed an outline free trade agreement seeking to maintain trade arrangements with South Korea.