LONDON—When the U.K. voted to leave the European Union in 2016, the British government had no chief trade negotiator and only a handful of people engaged in trade policy. As part of the EU, Britain hadn’t been able to forge its own trade deals since the 1970s.
Prime Minister Theresa May pledged that would change after Brexit. To revamp its new Department of International Trade, the U.K. government hired Crawford Falconer, a grizzled, tough-talking trade expert from New Zealand, one of the world’s most pro-trade countries.
To make the new unit into a negotiating powerhouse, the government has drafted about 400 staffers, launched a school for trade negotiators, begun simulations of trade talks with the U.S. and wheeled in retired British trade specialists to share tips.
But there is a problem: Come Brexit day, Mr. Falconer’s outfit probably won’t be able to land any significant free-trade deals. That is one issue of contention helping to fuel this week’s standoff between Britain and the EU over the shape of their post-Brexit relations.
As it turns out, Britain may have to agree on a departure from the EU that foresees it staying in the trade bloc’s customs area for many years. That would mean the U.K. accepting the EU’s schedule of tariffs, severely restricting its ability to make free-trade deals with the likes of the U.S. and Japan.
It is “not at all clear” when the U.K. will be in a position to negotiate big trade deals, said Stephen Adams, a partner at consultancy Global Counsel.
Mr. Falconer says he is unfazed by the prospect of a Brexit agreement that would leave the U.K. unable to strike trade deals around the world. “There is no reason for me to suddenly be worrying about Plan B over something that is not the government’s policy,” he says in an interview.
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