On Tuesday, the Telegraph newspaper reported that Britain could enter a formal trade alliance with Canada, Mexico, and the United States if the European Union denies negotiating a post-Brexit trade deal.
The newspaper said that British ministers were looking at the possibility of entering the North American Free Trade Agreement (NAFTA) as part of planning for the probability of Britain’s withdrawal from the European Union in March 2019 without a trade deal.
“As we prepare to leave the EU, we will seek to transition all existing EU trade arrangements to ensure that the UK maintains the greatest amount of certainty, continuity and stability in our trade and investment relationships,” said a spokesman for the Department for International Trade.
When asked for comment, the spokesman stated: “We are confident that we will find a deal that works for Britain and Europe too. But it is our responsibility as a government to prepare for every eventuality, and that is what we are doing.”
Currently, Britain is negotiating the terms of its divorce from the European Union although Theresa May is pushing to move onto discussions regarding a major free trade deal with the biggest trading bloc in the world.
With the clock ticking down towards the Brexit day in 2019, British ministers are considering the options if the fifth largest economy of the world drops out of the European Union without a clear trade deal.
Aside from aiming to secure a U.S. trade deal or organising some new trade grouping, some British supporters of Brexit have pondered on joining an existing trade alliance such as NAFTA.
However, Donald Trump, the U.S. President, has warned that he may terminate the 1994 NAFTA deal because he says that it does not serve U.S. economic interests.
According to trade analysts, if ever Britain did join NAFTA, manufacturers wanting to export to the European Union and North America would have to produce products in accordance with the two separate sets of rules.
Britain, whose regulation has been within the orbit of the European Union for more than 40 years, would also be required to shift towards the North American model for goods, services, data protection, and competition policy.
The European Union is the biggest single export market of Britain, accounting for around 50 percent of goods exports in August. While accounting for 14 percent in August, the United States was the single biggest destination for British exports.