Liam Fox admits Japan trade deal will not be completed by Brexit day

However, in addition to the Japan deal, the department has also confirmed the EU’s customs union agreement with Turkey, covering 1.39% of UK trade, will also not be transitioned on exit day.

Fox predicted in 2017 that the UK would be able to replicate up to 40 EU deals – accounting for around 11% of the UK’s trade – ready for ‘a second after midnight’ on Brexit day. And just last month, international trade minister George Hollingbery told the Commons he was confident the majority of the deals would be in place by March 29.

But ‘continuity agreements’ have so far only been agreed with seven of the 69 countries and regions with which the EU has trade deals: Switzerland, Chile, the Faroe Islands, Eastern and Southern Africa, Israel and the Palestinian Authority.

The EU’s trade agreement with Japan came into force only at the start of February, covering 635 million people and created the world’s largest bilateral free trade zone.

It also removed the majority of the one billion euros (£900 million) of duties paid annually by EU companies exporting to the far eastern state.

But unless the UK can finalise a Withdrawal Agreement by March 29 allowing Britain to continue participating in EU trade deals during a 21-month transition period, it will enjoy the benefits of the Japanese agreement for just 57 days.

The DIT statement said: ‘While a number of these continuity agreements are likely to be concluded by exit day, it is the duty of government to produce a highly cautious list of those that may not be in place in order that businesses and individuals ensure that they are prepared for every eventuality.

‘It remains our priority to conclude trade continuity agreements with these countries by exit day or as soon as possible thereafter.’

The department said that mutual recognition agreements signed with the USA, Australia and New Zealand should ensure that businesses do not face additional bureaucracy after Brexit.

Speaking in the House of Commons, Fox insisted it would be possible to secure ‘sufficient access’ to the European market ‘in a way that doesn’t tie our hands to increased access to other markets’.

He said: ‘It is possible to both maintain our trade with the European Union and to improve our trade with the rest of the world. In fact, Britain will have to do so if we want to generate the sort of incomes we require for the provision of our public services.’

The EU trade deals offer UK companies benefits like reduced tariffs on goods, enhanced access to markets for services, relaxed place-of-origin rules and common standards on intellectual property.

In the event of a no-deal Brexit, all trade with these countries, including South Korea, Canada and South Africa, will be conducted under World Trade Organisation rules, which require tariffs on many products.

People’s Vote supporter and Labour MP Stephen Doughty said: ‘Brexiters promised that voting Leave would mean a bonanza of new international trade deals that would make up for lost trade with the EU.

‘Instead, Brexit is costing us the global trade deals we already have as EU members.

‘Liam Fox is now finally admitting that his promise to roll over all existing EU trade deals in time for Brexit is going to be broken.’

Chuka Umunna, who quit Labour on Monday to join the new Independent Group of MPs, said: ‘During the referendum Brexiteers repeatedly promised that a raft of trade deals would be fully negotiated and ready to be implemented by exit day.

‘Now Liam Fox has admitted it won’t happen.’

And Liberal Democrat leader Sir Vince Cable said: ‘One of the great myths of Brexit was that we could instantly sign new trade deals whilst seamlessly rolling over the existing deals we already have with over 70 countries as a member of the EU.

‘This is damaging myth which has proven to be false.

‘Should no-deal materialise, this will cause serious problems for our economy.

‘Theresa May must take no-deal off the table and give the public the final say with a People’s Vote and the option to stay in the EU.’

Labour’s Virendra Sharma, a supporter of the Best For Britain campaign for a second EU referendum, said: ‘Fewer trade deals means we become poorer as a nation.

‘The government needs to recognise this and offer the public the option to prevent the oncoming Brexit cliff-edge.’