UK distances itself from ‘laughable and unhelpful’ plan to join North American trade pact

Canadian, Mexican, and British officials were left confused and angry at mooted bid to join the USMCA bloc

Anna Isaac
Thursday 23 September 2021 09:57
Mexico, Canada and US sign USMCA trade deal at G20 in Buenos Aires, Argentina
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The UK has distanced itself from an “unprofessional” and “frankly embarrassing” plan to try and join a North American trade pact, just 24 hours after mooting the idea.

Canadian and Mexican officials were left upset after the UK briefed that it wants to join the tripartite deal between the US and the two countries (USMCA), blindsiding them just as they prepare for fresh bilateral talks with London.

The briefing from a senior UK government figure on Tuesday, during a trip to the US, caught officials off guard amid sensitive preparations for renegotiating bilateral deals, according to people familiar with the talks on all sides of the table.

“It’s just unprofessional, if I were to say it straight,” according to one person familiar with the efforts of Canadian officials preparing for fresh talks with the UK in order to improve on rollover deals that were hurried through ahead of Brexit deadlines.

“On one side, it’s laughable that the UK would try and join USMCA, on another, of course we have to weigh such statements in light of serious talks with Britain and work out if there’s anything behind it.”

After the confusion over UK plans to join USMCA, No 10 tried to pour cold water on the idea on Wednesday, and instead reiterated interest in a bilateral deal.

The prime minister’s official spokesperson said: “What we are focused on is the US deal,” said the spokesperson. “There are no plans to go beyond that at this stage. That is the priority for us.”

A different person familiar with the Mexican and UK trade negotiations said, that while it is not a realistic prospect for the UK to join the North American trade bloc, it was still “an extremely unhelpful statement”.

On one side, it’s laughable that the UK would try and join USMCA, on another, of course we have to weigh such statements in light of serious talks with Britain and work out if there’s anything behind it

Source close to Canadian trade talks

“We had not heard anything about this.” They added: “It would be well to remember that there are three members of this trade group, not just the US.”

Bilateral ties with Canada and Mexico are especially sensitive for the trade department, as they are also members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade bloc in the Asia Pacific region which the UK has officially asked to join.

Meanwhile, a person familiar with UK trade negotiations said that while opposite numbers are very generous at seeing the funny side of things, the UK cannot afford to “seem rude”. They added that it was “frankly embarrassing” and not practical for the UK to join USMCA, citing strict rules on where goods can come from in order to avoid tariffs under the deal.

The diplomatic upset comes as foreign secretary, Liz Truss, is expected to visit Mexico on Thursday in an effort to boost Britain’s economic and diplomatic ties with the country and region.

“The USMCA is obviously not just a deal with the United States,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics and former senior economist for international trade at the White House.

“It’s also a deal with Canada and Mexico and they would have to be willing to allow the UK to join. They would have demanding terms as well. If you’re already in the process of negotiating an agreement with them you can imagine this would upset the applecart,” Mr Bown said.

Headlines regarding the US’s reluctance to pursue a trade deal with the UK dogged Boris Johnson’s trip to the country.

A trade deal with the US was considered a key prize of a post-Brexit independent trade policy, but Mr Johnson said prior to his meeting with US president Joe Biden that his opposite number “has a lot of fish to fry”.

Tension over the implementation of the Northern Ireland Protocol, a tenet of the Brexit divorce agreement between the UK and EU, is a key roadblock to any bilateral deal with the UK, a US official told The Independent. Any deal was therefore unlikely to be considered until after a consent vote on the Northern Ireland Protocol in 2024, and the US midterm elections in 2022.

There are also host of tough political challenges facing the Biden administration’s domestic agenda.

“They’ve got masses of legislation they’re trying to get through Congress, where they have a razor-thin margin,” said Mr Bown. “Trade in the United States right now is just incredibly politically risky. It’s a heavy lift to ask any president to commit political capital to trade, there’s no appetite at the moment.”

Some trade experts welcomed suggestions from Mr Johnson that he would seek the right kind of deal with the US rather than rush to an agreement – in the event it were possible. It marks a change in the prime minister’s stance compared to when a deal looked more likely under the Trump administration.

“The USTR (US trade department) are formidable. They just have decades of experience of negotiating far and wide across the world,” said Dr Silke Trommer, a senior lecturer in politics at the University of Manchester. “We have many brilliant people in this country, some people with very good experience, but it’s just not at the same level.”

UK officials drew a parallel between the briefing and another UK media report which suggested Australian trade minister Dan Tehan would be placed in an “uncomfortable chair” in the Foreign Office, and that he lacked experience in negotiations. Mr Tehan has experience of trade policy dating back to 1995.

After the report about trade negotiations with Australia, one senior British diplomat said they had been given a cushion by an Australian opposite number. This followed a spate of British diplomats being sent jam, after then trade secretary Liam Fox suggested on social media that France needed “high quality, innovative British jam”.

The Canadian high commission and the Mexican embassy did not offer comment ahead of publication.

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