Canada and the USA Explore Free Trade with the UK

CIC News
Published: January 1, 2000

According to a recent article appearing in Canada's "National Post" newspaper, the Canadian and U.S. governments are interested in exploring the possibility of bringing Britain into the North American Free Trade Agreement (NAFTA).

NAFTA is a tri-partite agreement among Canada, the U.S. and Mexico, which created a free trade zone between the three countries. NAFTA is different from the European Union -- of which Britain is a member -- in that NAFTA did not create a full-blown economic union among its signatories.

Trade experts warn that the main impediment to Britain becoming a party to NAFTA is the European Union itself, which prevents its members from joining other trade alliances. Michael Hart of Ottawa's Centre for Trade Policy cautioned that if Britain were to join NAFTA, "They would have to turn their backs on Europe, with which they're fully engaged. That would cause real wrenching adjustments and for what? Not a lot of gain."

Britain is Canada's third-largest export market, after the U.S. and Japan, but only accounts for 1.4% of total Canadian exports, compared to the 85% of exports to the U.S. market.

The U.S. International Trade Commission will conduct a study on the matter and has promised to hold a hearing on April 11, 2000.

Canadian supporters of free trade with Britain are confident that even if full-blown NAFTA membership is not feasible, many barriers to trade can be lifted or reduced "without resorting to complicated free-trade negotiations."

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