U.K. Weighs Joining USMCA Pact as Hopes for U.S.-Only Deal Fade

U.K. Weighs Joining USMCA Pact as Hopes for U.S.-Only Deal Fade

The U.K. is exploring joining an existing free-trade agreement between the U.S., Mexico and Canada, a person familiar with the nation’s thinking said, a recognition the Biden administration won’t start negotiations on a bespoke deal any time soon. 

The U.K. is conducting simultaneous negotiations around the world to replace its prior free-trade treaty with the European Union. So far it has struck deals with the EU, Japan and Australia, as well as multiple other trade-continuity accords.  

Prime Minister Boris Johnson indicated Tuesday that he doesn’t expect to secure the free-trade pact he seeks with the U.S. before the next U.K. general election due in 2024. A trade deal with the U.S. was billed as one of the prizes of Brexit, so Johnson is under pressure to prove the biggest upheaval in British foreign policy in 50 years was worth it. 

A spokesperson from the office of the U.S. Trade Representative said it hasn’t received a request to join the U.S.-Mexico-Canada Agreement, known as the USMCA, adding that there is no accession clause in the accord.

One of the deal’s negotiators, Kenneth Smith Ramos, who led technical talks for Mexico in 2017 and 2018, said that while it’s theoretically possible for the U.K. to join the USMCA, that would require consensus among the U.S., Mexico and Canada to accept the nation, a potentially tricky proposition.

The U.K. also would need to accept liberalization for goods that trade tariff free under the USMCA, he said. Mexico’s trade with the U.K. is governed by a December 2020 continuity agreement that extends the rules of the Mexico-EU deal that took effect in 2000 for three years after Britain’s departure from the EU. But that deal only opened about 60% of agricultural trade, making it more limited in scope than the USMCA, said Smith Ramos, a partner at consulting firm AGON.

Joining USMCA is just one option, according to the person who asked not to be identified because the discussions are private. Doing a series of smaller U.S.-U.K. deals on issues such as the free flow of data is another, the person said.  

Addressing reporters at the White House at the start of a meeting with Johnson Tuesday, President Joe Biden said, “We’re going to talk a little bit about trade today and we’re going to have to work that through.”

Any U.K. effort to join USMCA would face major political and procedural obstacles and could be interpreted as an effort by Downing Street to play catch-up given the EU has separate trade deals with Canada and Mexico. USMCA is the successor to the North American Free Trade Agreement, which the Trump administration rebranded after two years of tough negotiations with its southern and northern neighbors.

The U.K. has also submitted a formal application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, a free-trade pact between 11 countries around the Pacific Rim, with officials expecting an accord by the end of 2022. The U.K. would like the U.S. to join the CPTPP, the person said. 

Negotiations on a bilateral trade agreement with India will begin in November, the person said.

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