Britain Reportedly Considering Joining NAFTA Right as Trump Hopes to Burn It Down
Timing, Brits. Timing.
As the future of the North American Free Trade Agreement hangs in the balance, British ministers have decided now would be a great time to consider the possibility of joining the embattled pact, according to a report in the U.K. newspaper the Daily Telegraph. That’s an indication of how desperate the British government may be as it spirals ever closer to Brexit without any free trade deals lined up to replace what it would lose with Europe.
Renegotiation talks among NAFTA members are set to restart this week, but President Donald Trump recently threw cold water on hopes for a happy resolution.
The U.S. administration has made several demands that Mexican senators and Canadian analysts have deemed “red lines” that would end their participation in the renegotiations. Those demands increase the possibility that Trump would follow through on his threats to withdraw the United States from the almost quarter-century-old agreement.
The idea of Britain joining NAFTA, in theory at least, is understandably attractive. NAFTA would open up an economic market of $16.2 trillion, the combined GDPs of the three member countries, to replace the $16.3 trillion GDP of the European Union.
Joining NAFTA is one of the British government’s “no deal” scenarios, according to the Telegraph, meaning a sort of contingency plan in case Brussels refuses to meet British demands and the United Kingdom must leave the economic union without any kind of trade agreement.
It’s hardly a new idea. In 1998, former Republican House Speaker Newt Gingrich brought up the possibility of making Britain a NAFTA associate member. Two years later, then-British Conservative Party member Roger Helmer published an opinion piece in the International Herald Tribune arguing that the U.K. should forgo the EU in favor of NAFTA.
Since a majority of British voters checked the “leave” box on June 23, 2016, a flurry of op-eds in both the United States and Britain have hailed the idea of joining the transatlantic neighbors in the landmark free trade deal.
If NAFTA survives, Britain may find Republican support for joining the pact. Republican House Speaker Paul Ryan has said he would support a trade agreement with a post-Brexit Britain, and Trump, who has previously expressed approval for the Brexit vote, has a reasonably good rapport with British Prime Minister Theresa May.
But that’s a big if. As it is, the Trump administration has made several demands that Mexico and Canada cannot abide, including a “sunset clause” that would require a renegotiation of NAFTA every five years, requirements for U.S. content in the automobile sector, and getting rid of the Chapter 19 dispute resolution mechanism.
Mexican economists have criticized Trump’s attitude toward trade and economy as looking to the past rather than the future, emphasizing traditional industries rather than modernizing the agreement to include e-commerce and big data.
Britain may have picked the worst possible time to consider boarding what may be a sinking ship.
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Bethany Allen-Ebrahimian is a journalist covering China from Washington. She was previously an assistant editor and contributing reporter at Foreign Policy. Twitter: @BethanyAllenEbr