David Davis says he is still optimistic about striking a Brexit deal despite his cabinet colleague Liam Fox claiming the EU was trying to blackmail the UK.
A third round of negotiations in Brussels finished on Thursday with the EU saying there had been no progress on key issues, with talks stymied by the gulf between the two sides over a settlement that could cost up to £80 billion.
READ MORE: Nicola Sturgeon unveils bold vision for Scots economy
Speaking from Japan, where he has been leading a delegation of 15 UK business leaders, Mr Fox denied it was time for the UK to name its price in order to clear the deadlock.
“We can’t be blackmailed into paying a price on the first part,” he said. “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.”
Mr Davis tried to strike a more positive tone in a speech to the US Chambers of Commerce in Washington DC yesterday, saying the UK’s “overarching aim” was to secure a “successful future partnership” with the EU that delivers the “most seamless and frictionless trade in goods and services possible”.
The Brexit Secretary added: “There are many that doubt this is possible but when I spoke to my European counterpart Michel Barnier I said to him once: ‘The pessimist sees difficulty in every opportunity, the optimist sees opportunity in every difficulty’.
“And as ever on that front I am a determined optimist in this - we will get to those opportunities.
“Because fundamentally I believe that a good deal is in the interests of both the United Kingdom and the European Union and of the entire global community.”
Mr Davis denied suggestions that the UK would enter a race to the bottom on corporate taxes and business regulation after leaving the EU, insisting the UK would act as a “global leader raising standards across the world”.
He said post-Brexit Britain would have an opportunity to lead a “race-to-the top” and championed free trade as the way to tackle the “greatest social and economic challenges” facing the world.
Mr Davis denied he faced a hostile reception in Brussels this week, joking that EU officials had called him a “charming bastard” during his time as Europe Minister under John Major.
He said: “My message is clear: the answer to these challenges is not to turn inwards and become isolationist.
“The answer to the economic problems of the west cannot be to turn our back on globalisation and trade - it’s to lead the world forward once again.”
On Thursday, Mr Davis said the third round of Brexit talks had seen “tough” discussions regarding the size of the UK’s exit bill.
Taking questions after the speech, Mr Davis said he had ruled nothing in or out regarding whether the UK would pay part of its exit bill during a transition period.
He said: “What’s been going on is that we have got to the point today where there has been some pressure over the last couple of days, pressure over the question of whether we pay a divorce bill, a separation bill, and if so what it is.
“And there have been stories flying around, some of them emanating from Paris, that maybe one way of doing this is to pay for the transition period and so on. Well, I can’t comment because we haven’t started that negotiation.
“I’m not ruling anything in or out. I never do. It’s an idea that’s been floated around.”
Mr Davis said the divorce payment negotiations were getting “tense”.
“What we have been doing, as you do if somebody provides you with a good bill, a large bill, is go through it line by line, and we’ve got very good lawyers. So, it’s getting a bit tense. But, it’s only early stages.”
Mr Davis said a transition period would not be “clear cut”.
“This transition period, people tend to think of it as a single thing, actually it’s not.
“The nature of the implementation period, or the transition period, if we agree such a thing, is not as clear cut as people say.”