David Davis will insist that the UK will be able to negotiate trade deals as soon as it leaves the European Union even though it will still follow many of Brussels’ rules.
The Brexit Secretary will spell out the Government’s aims for an “implementation period” after leaving the bloc in March 2019 during which the UK will effectively follow the regulations of the single market and customs union.
But he is prepared for a clash with Brussels over the prospect of carrying out independent trade talks and potentially signing deals which would come into force once the transition period is over.
The intervention, in a speech in Middlesbrough, comes after Mr Davis clashed with prominent Tory Eurosceptic Jacob Rees-Mogg over the terms of the transition period which the influential backbencher claimed will leave the UK a “vassal state”.
Mr Davis will say: “As an independent country, no longer a member of the European Union — the United Kingdom will once again have its own trading policy.
“For the first time in more than 40 years, we will be able to step out and sign new trade deals with old friends, and new allies, around the globe.”
Highlighting the importance of emerging markets in Asia and the Americas, Mr Davis says the fastest-growing export destinations between 2005 and 2014 included China and Brazil.
“We will be able to do so much more with them, when we are an independent trading nation, outside of the EU,” he will say.
“Of course maintaining access to each other’s markets on current terms means we will replicate the effects of the EU customs union during the implementation period.
“But participating in a customs union should not preclude us from formally negotiating — or indeed signing — trade agreements.
“Although, of course, they would not enter into force until the implementation period has ended.”
Giving evidence to MPs on Wednesday, Mr Davis indicated “there may well be an argument” on the issue because “there are people within the union who want to restrict any advantage for us”.
The EU will demand that European law continues to apply in the UK during the planned transition period after it leaves the bloc, according to the latest negotiating guidelines drawn up in Brussels.
The guidance, obtained by Channel 4 News, says any changes to the EU “acquis” – the accumulated body of case law and legislation – should “automatically” apply to Britain during the transition, even though it will have no say in the decision-making process.
Jacob Rees-Mogg clashed with David Davis over the terms of a Brexit transition period (Yui Mok/PA)
The confirmation that the UK will have to abide by any new EU laws and rulings by the European Court of Justice (ECJ) during the transition – expected to last almost two years – will heighten the concerns of pro-Brexit Tory MPs.
The guidance, setting out the negotiating mandate for the EU’s chief negotiator Michel Barnier for the transition talks, is expected to be formally adopted by foreign ministers of the remaining 27 member states in Brussels on Monday.
It states that the “full competences” of the EU institutions – “in particular” the ECJ – should be preserved during the transition period, which should not run beyond December 31 2020 – 21 months after Britain formally leaves the bloc.