THE POSSIBILITY of a trade pact between Britain and America has been raised in Washington, elevating an idea which has hitherto been the preserve of the political right to a more serious level.
The Senate Finance Committee has proposed a study to see if the United Kingdom could be brought within the aegis of the North America Free Trade Agreement (Nafta), which currently includes the US, Canada and Mexico.
It has asked the US International Trade Commission to study the idea, and produce estimates of the impact on trade, GDP, employment and investment.
Until now, the idea of opting out of the European Union and joining America instead has largely been the preserve of the right wing of the Conservative party and some Canadians, like Conrad Black, the owner of The Daily Telegraph.
But yesterday support from William Roth, chairman of the Finance Committee, and Daniel Patrick Moynihan, the senior Democrat on the committee and a well-respected figure on both sides of the political divide in Washington and London, means the idea will now be examined by the ITC, an independent body.
"I have long believed that both the United States and Great Britain would benefit from freer trade between our two countries," said the Senate Banking Committee's chairman Phil Gramm.
"We already have strong financial and historic ties; now it's time to further our relationship," he added.
Britain would have to leave the EU to join Nafta. European Union trade policy is made by the European Commission, and a unilateral decision to join Nafta would be impossible.
For the right, leaving the European Union is the main point of the exercise, while ensuring trade access to two of Britain's most important export markets, the US and Canada.
Britain accounts for two-thirds of all European investment in America, and is the largest foreign direct investor in the US. The US is the UK's largest single export market with combined annual exports of goods and services worth more than pounds 31bn.
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