California, Texas, Florida and New York each have economies large enough to allow them membership of the G20 if they were independent nations and Dr Fox believes many lucrative deals can be struck with states ahead of an all-encompassing treaty. Tariffs on goods can only be negotiated by Washington but deals on services – which account for the majority of Britain’s transatlantic trade – can be sealed at state level, unlocking billions of pounds of business for the UK economy.
Dr Fox will tell a business conference in Geneva a comprehensive free trade agreement with the US will encounter “unavoidable difficulties” because “the US will, quite correctly, negotiate hard for its own interests”.
He warned it “is likely to focus on better access for its agricultural products”.
Business chiefs fear UK insistence on upholding import bans on chlorine-washed chicken or hormone-fed beef is incompatible with a free trade agreement (FTA), meaning it will be difficult to convince Mr Trump to sign on the dotted line.
But Dr Fox will say Britain should concentrate on removing non-tariff barriers to trade with the US, which would not need an FTA.
Speaking ahead of the Geneva event speech, he told The Telegraph: “There are other things in the toolkit apart from FTAs.
“We should be concentrating on market access restrictions rather than solely FTAs with countries like America.”
Dr Fox will tell the Spinoza Foundation think tank that such side deals represent “enormous potential for Britain to trade more with the US, beyond the concept of an FTA”.
Meanwhile, the European Commission has reiterated the UK would have to accept less access to the single market if it carries out its threat of diverging from European Union-made rules after Brexit.
It comes as Chancellor Sajid Javid told businesses over the weekend that they would need to “adjust” to no longer being aligned with European trade stipulations.
The commission’s chief spokesman Eric Mamer told journalists at a briefing in Brussels: “We have had this conversation a number of times and we have made our position very clear.
“There is a link between moving away from EU regulations and the degree of access that is possible into the single market.
“That position has not changed. I think both sides have expressed their positions very clearly and, hence, I have nothing to add to the comments that were made this weekend.”
The European Commission confirmed it might take until March to draw up its own mandate for negotiating a trade deal with the UK.
Asked about the time frame for starting negotiations with the UK, Mr Mamer said: “The commission can adopt its proposal for the negotiation directives only once the UK has actually withdrawn from the EU.
“But then there is still an institutional process for these to be adopted by the European Council.
“This we know will take some time, which is why we have said we will start negotiations as quickly as we can, but it will certainly not be before the end of February, beginning of March.
“This is not a slowing down or speeding up of the process. This is simply the nature of the institutional process and the consultations that need to take place before the negotiation directives can be formally adopted.”