UK hopes to join US-Mexico-Canada trade deal

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The UK hopes to join a trade deal between the US, Mexico and Canada as expectations fade for an impending bilateral deal with Washington.

The USMCA trade deal was signed by then-President Donald Trump with Canada and Mexico last year after a lengthy renegotiation of the existing 1994 NAFTA deal between the three countries.

The deal, which was widely supported by Capitol Hill Democrats, included stricter environmental and labor standards, a new digital chapter, and strict rules of origin for the auto industry.

British officials said on Tuesday shortly before British Prime Minister Boris Johnson met with President Joe Biden that the UK was considering applying to join the USMCA. “There are different ways of doing this,” noted a senior official. “The question is whether the US administration is ready. The ball is in the court of the United States. It takes two to tango. “

Britain already has trade deals with Canada and Mexico, so the main gains would be tied to the US element of the deal.

However, the Biden administration has made it clear that trade deals are not a legislative priority because they focus on its national economic agenda.

Trade experts questioned whether it was realistic for the UK to join the pact and, even if it could, whether the price of entry was worth it.

Dmitry Grozoubinski, business consultant and visiting professor at the University of Strathclyde, said any membership process would leave the US, Mexico and Canada with the whip hand, free to name their award to join what is essentially a regional trade pact.

“It is certainly ambitious,” he said, “and it is also unclear how this would solve the fundamental challenges of a free trade agreement between the United States and the United Kingdom, namely on the one hand that the United States has no appetite for it and, on the other hand, there are still important areas, such as agri-food standards, on which the two sides fundamentally disagree.

David Henig, director of the UK Trade Policy Project, said there was “someone else’s trade agreement with rules made by someone else”.

Henig estimated that membership in the USMCA could add perhaps only 0.1 to 0.2% of gross domestic product to the UK economy while leaving Britain open to some of the problems associated with a possible US bilateral trade agreement.

“Are the benefits really worth it?” ” He asked.

The USMCA also has limited coverage of most of the UK’s competitive advantages in exports, including services, and would subject many UK businesses to two competing sets of regulations.

But Sam Lowe, a researcher at the Center for European Reform, said it would be “a great opportunity” if Britain joined the USMCA, even though he was skeptical of that happening.

“You would have all the problems with a bilateral relationship with the United States – they don’t go away,” he said. “But from an economic point of view an agreement would not be negligible.”

Pro-Brexit politicians in the UK have long emphasized that a trade deal with the US is one of the great benefits of leaving the EU. Prominent figures in the Trump administration early last year pledged that a US-UK trade deal was high on the priority list.

However, the UK’s hopes of securing a bilateral trade deal with the US have faded since Biden came to power in January.

Speaking alongside Johnson ahead of the White House meeting on Tuesday, the US president said the pair will discuss trade. “On a free trade Brexit. . . We’re going to talk a bit about trade today and we’ll have to think about it, ”he said.

The two sides did not resume formal talks and Katherine Tai, the US trade representative, provided an assessment of the state of the negotiations.

On Britain’s offer to join the USMCA, a USTR spokesperson said: “We have not received an application to join the USMCA and there is no of membership clause in the agreement. ”

British officials have previously expressed hope that the United States will join the trade bloc of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, opening a back door to closer trade ties between the United States and the United Kingdom, because London is also seeking to become a member of the CPTPP.

They have reportedly voiced concerns to their US counterparts that trade ties are stronger between the UK, Canada and Mexico than between the UK and the US.

Speaking to Sky News ahead of a meeting with Biden at the White House on Tuesday, Johnson sidestepped whether he could strike a trade deal with the United States by 2024.

“We will pursue free trade agreements around the world, including the United States. I have many reasons to be optimistic about this. But the Americans are negotiating very hard, ”said the Prime Minister.

“We’re going to go as fast as possible. “

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