Brexit secretary also tells US Chamber of Commerce Britain will not take part in a ‘race to the bottom’ to secure trade deals

The Brexit secretary, David Davis, has taken aim at the isolationist rhetoric of Donald Trump in a pointed speech in which he told US business leaders that free trade was the solution to, not the cause of, global turmoil.

Speaking to the US Chamber of Commerce, Davis said Britain would not take part in a “race to the bottom” in order to secure new free trade deals with countries outside the EU after Brexit.

But he conceded that one of the UK government’s Brexit proposals, a so-called track-and-trace scheme using technology and trust to replace customs controls as part of a mooted new customs arrangement, may not happen.

Asked by a FedEx executive to explain how the proposed regime would work in practice, Davis said it was less likely to be accepted than a more conventional system, adding that it was “blue-sky”.

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He said he did not want to see a return to 1930s-style protectionism and hinted that the US president should rethink his policy on global trade. “The answers to the problems of the west cannot be to turn our backs on globalisation and trade,” Davis said, without mentioning Trump directly. “It feels to me it is necessary to make the case once more for free trade and capitalism.”

Trump has been a firm advocate of a new protectionist agenda for the US, prioritising its manufacturing, and has blamed “terrible deals” with states such as China and Mexico for much of the country’s economic problems.

Davis said the pace of change “may feel like a threat”, but said western economies had to find ways to compete. “There is no future in trying to be cheaper than China,” he said.

Instead, he said the major aim of US-UK cooperation should be a renewed focus on easing trade in services. “We must work together to convince other countries of the benefits,” he said.

Asked by one business leader if the UK had been able to persuade the Trump administration of the importance of services as well as goods, given Trump’s particular fixation on the US automotive industry, Davis said: “It’s natural I’m afraid in politics for people to focus on the obvious, and it’s easy to see lots of cars crossing a border, for example. It’s harder to see the effect of the virtual world of services. But we are working on it.”

In the speech, Davis also appeared to give his backing to cabinet colleagues such as Michael Gove, who has said the UK is not prepared to consider lowering standards on items such as chlorinated chicken in order to secure a trade deal with the US.

Liam Fox, the international trade secretary, has suggested that the UK should be open to more flexible regulations in order to open up new markets.

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Davis said he was “no fan of excess burdens for business ... [but] we will not be engaging in a regulatory race to the bottom.” He said Britain had an “opportunity to lead a race to the top on quality and standards across the globe”.

Asked about the timeframe for a new US-UK free trade deal, Davis said he did not expect any new agreements to come into force during a transition period after the UK leaves the EU, but added that new deals could be concluded in preparation for the end of the transition.

However, he also refused to rule out the UK would paying part of its EU exit bill during the transition period. “I’m not ruling anything in or out. I never do. It’s an idea that’s been floated around,” he said.

Davis called the Brexit negotiation “probably the most complicated negotiation in history and our enemy is time”.He said the UK was going through the EU’s financial demands “line by line and we have very good lawyers, so it is getting a bit tense”.

Throughout the speech, Davis struck an upbeat note and called himself a determined optimist after the bruising round of talks in Brussels, where the EU’s chief Brexit negotiator, Michel Barnier, said progress was hampered by a “lack of trust” between the two sides.

Instead, it was Fox who continued the war of words with Brussels as Davis flew across the Atlantic to woo US business leaders.

Speaking in Japan on a trip with the prime minister and business leaders to lay the groundwork for future trade talks, he said the UK “can’t be blackmailed into paying a price” when asked whether it was time for the UK to name a figure for an exit settlement.

“We think we should begin discussions on the final settlement because that’s good for business, and it’s good for the prosperity both of the British people and of the rest of the people of the European Union,” he said.

Asked whether he agreed with Fox, Davis said he did not want to comment directly. “We are in a difficult, tough, complicated negotiation; it will be turbulent and what we are having is the first ripple, and there will be many more ripples along the way,” he said.

Davis said he was confident the government would last the next five years, beyond the Brexit cut-off date of March 2019. “The real issue on Brexit is mostly practical, what is in the mutual best interest of all [of] us,” he said. “That’s the driver. There is a majority to carry Brexit through parliament.”