Britain urged to join NAFTA and TPP after Brexit

by Latika Bourke (feat. John Weekes)

Newcastle Herald
April 27, 2017

London: The UK is being urged to join the multilateral trade agreements being abandoned by US President Donald Trump and Australia's High Commissioner in London, Alexander Downer says Australia would have no objection to Britain joining the Trans-Pacific Partnership trade deal.

Leading figures on global trade addressing the 2017 Prosperity conference in Westminster, said the UK should focus on joining existing trade agreements when Britain leaves the EU, expected by March 31, 2019.

The conference coincided with reports from Washington that the US may withdraw from North American Free Trade Agreement (NAFTA) altogether, instead of revising the current deal between Canada, Mexico and the United States.

President Trump has already said the US will quit the Trade Pacific Partnership (TPP) of which Australia is a member.

The minister for Brexit David Davis told the conference the government is seeking "to avoid any cliff edges," a view he said was shared by a number of EU nations.

He said Britain would pursue an "ambitious" free trade agreement with the EU of "unprecedented scope."

"Britain's departure from the EU should not be viewed through a protectionist lens," he said.

Trade experts cautioned Mr Davis and his colleagues against striking a post-Brexit trade deal with the EU that would reduce its ability to negotiate new agreements with other countries like the United States and Australia.

John Weekes was Canada's chief negotiator on NAFTA and said he would advise Britain's Trade Secretary Liam Fox to step into the United States' place so the UK wouldn't have to start new trade agreements from scratch.

"It would make a lot of sense for the UK to join the NAFTA. There is an accession clause in NAFTA," he said.

Mr Weekes said this should also apply to the TPP, which despite the US pulling out, remains alive due to a significant shift from Japan's prime minister Shinzo Abe, who is now signalling the agreement can stay alive without the US.

"Although its called the Trans-Pacific Partnership why not think of from a UK perspective of joining that?"

"In many ways the TPP agreement is already a modernisation of the NAFTA because it involves the three NAFTA countries and it's kind of an update of the NAFTA," he said.

The TPP without the US involves Australia, China, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Australia and New Zealand fought hard to keep the TPP alive after President Trump withdrew the United States with prime minister Malcolm Turnbull, foreign minister Julie Bishop and trade minister Steve Ciobo remaining deeply engaged with Japan, which initially said the TPP was dead without the US.

Australia's High Commissioner to Britain Alexander Downer said Australia would welcome the UK into the TPP. "I think the TPP will go ahead myself," the former foreign minister said, citing Japan's changed position.

"The TPP is 40 per cent of global GDP if you include the US and even if you don't its still a big part of the global GDP, could the UK join that? We wouldn't have any objection," he said.

"Setting up new structures would be a laborious way to start," he said.

"I think better to start with bilateral agreements and have a look if there are other plural-lateral agreements you might like to think of joining."

But he said the UK had not provided a "clear sense" of its ultimate goals for its trade agreements post-Brexit, a criticism of the UK's unclear plan of how Britain will operate after leaving the single market.

Britain is also being warned against staying too close to the EU once it leaves as it would risk its ability to strike new trade deals. Mr Weekes said if Britain enshrined EU rules on quarantine and agricultural rules it would put other potential trade deals at risk.

He urged the UK to conduct informal talks with the countries it wants to strike trade deals with while it negotiates to leave the EU. Under EU rules, Britain is forbidden from formal negotiations with other trade partners until it has formally left the union.

Mr Downer backed this and warned Britain against copying the EU's tendency to try and mandate unrelated issues like environmental and labour standards into trade deals."

"If you want to build all those things into trade agreements, you just won't make many trade agreements very fast," he said. "You will find it hugely difficult."

Mr Downer said Australia's approach to trade is for it to be as free as possible because the cheapest possible imports are good for consumers.

He said while this can hurt some industries, overall the economy benefits.

But the former New Zealand trade minister Lockwood Smith told the conference that "global trade has been in trouble since the financial crisis."

He urged the UK to pick up the baton in advocating for freer trade.

"The world needs you right now, whatever you do, don't waste this moment," he said.