UK mulls bid to join North American trade pact

‘He has a lot of other fish to fry’: Boris Johnson admits agreement with UK not a priority for Biden

(PA)

Britain may bid to join the trade partnership between the US, Canada and Mexico, after Boris Johnson gave up on his dream of a bilateral deal with Washington, The Independent understands.

The unexpected initiative comes as London accepted that a direct free trade agreement (FTA) with the UK is not high on US president Joe Biden’s list of priorities, with Boris Johnson admitting: “He has a lot of other fish to fry.”

Biden himself gave no cause for optimism about a swift FTA when he met Johnson in the White House on Tuesday, saying only that the pair would talk “a little bit” about trade and that the subject needed to be talked through.

He also repeated his warning to the PM not to allow Brexit to derail peace in Ireland, saying he feels “very strongly” that he does not want a change to the “Irish accords” resulting in “a closed border”.

London’s interest in joining the North American pact follows the opening of talks, expected to conclude next year, for the UK to become the first European member of the CPTPP Pacific trade group.

It reflects the government’s efforts to strike tariff-reduction deals with partners around the world to make up for some of the 4 per cent long-term hit to GDP expected from new barriers to trade with the EU as a result of Brexit.

A senior UK government figure said that the current impasse over the FTA would not stop Britain from seeking other avenues for improving trade links with the US.

These could include a series of smaller sectoral deals, links via the CPTPP which the White House has recently expressed an interest in joining or even by inserting the UK as a fourth member in the  US-Mexico-Canada Agreement (USMCA).

UMSCA came into effect in July 2020 as a replacement for the earlier Nafta deal on a North American trade deal, which was torn up by Donald Trump. Covering areas ranging from motor vehicles and steel to agricultural produce and data transfers, Washington says the deal should boost US GDP by $68bn and generate 176,000 jobs.

There has previously been no talk of extending the three-nation arrangement beyond the continent.

But the UK government figure said it was an option London was interested in pursuing, adding: “There are a variety of different ways to do this. The question is whether the US administration is ready.

“The ball is in the US’s court. It takes two to tango.”

Coupled with the distractions of Covid and the withdrawal of troops from Afghanistan, Britain judges that part of the reason for FTA talks running into the sand is the time needed for Mr Biden to establish an administration and determine priorities. Key potential interlocutors are yet to be appointed.

London has tried to make a merit of the embarrassing stalemate in US talks, insisting that it demonstrates the wisdom of pursuing a multi-track approach of exploring opportunities with multiple potential partners, such as the CPTPP Pacific group and India, which now appear more likely to be concluded swiftly.

To some scepticism, Mr Johnson claimed it was his preference to take the time needed to get “a deal that works for the UK” rather than rushing into a quick agreement as he had originally attempted.

Mr Johnson said in 2017 that the UK was “first in line” for an FTA with the US after Brexit-backing Trump’s election as president.

The UK opened trade talks with the US immediately after the official date of EU withdrawal in January 2020, but the drive for what was billed as the greatest prize from Brexit foundered over differences about chlorinated chicken, hormone-pumped beef and access to the NHS.

The wind was taken out of the sails of talks by Mr Trump’s replacement as president by Biden, who has shown little of his predecessor’s appetite for deal-striking.

Ahead of his meeting with the president at the White House on Tuesday, Mr Johnson accepted a US FTA was not in prospect for the foreseeable future, telling reporters: “The reality is that Joe has a lot of fish to fry,” said the PM. “He’s got a huge infrastructure package, he’s got a ‘build back better’ package.

“We want to do it, but what we want is a good FTA, a great FTA. And I have quite a lot of experience of American negotiations, and they are pretty ruthless, the American negotiators. And I would much rather get a deal that really works for the UK than get a quick deal.”