The United States is threatening to exclude the United Kingdom from the Government Procurement Agreement (GPA)-a global trade pact which involves 46 members of World Trade Organization (WTO). The U.K plans to apply to rejoin the GPA since it will lose its membership after Brexit in March.
The U.S is taking advantage of the U.K’s weak bargaining position, exploiting points of leverage to gain an upper hand in negotiations, even from a close ally.
David Henig, a director at the European Centre for International Political Economy is not surprised by the antagonistic approach taken by the U.S.:
“The U.S. and other major countries see this current period as the best time to try to get concessions from the U.K. They know the U.K. is preparing for no-deal with the E.U, and need to have everything at place in the WTO in that eventuality.”
The United Kingdom is able to participate in the GPA via its membership in the European Union. After Brexit, London would need to ratify it independently so they can remain in the trade pact.
If this move pushes through, British companies will be denied access to an estimated $2trillion marketplace. U.K. companies such as Rolls-Royce Holdings Plc and Serco Group Plc could lose access to members’ procurement processes, including the $837 billion U.S. market.
A spokesman for the U.K.’s Department of International Trade said that majority of WTO members “support the U.K. continuing to be a part of it after we leave the European Union, which is in everyone’s interest.”
Stuart Harbinson, a former senior trade official at WTO and a senior consultant on international trade for the Brussels-based Hume Brophy communications agency said “It would be an act of senseless protectionism if the U.K. were shut out of the GPA”
He added, “There is a lot of senseless protectionism around at present. But in this case my bet would be that when the GPA members think they have squeezed the U.K. as much as they can they will agree to the U.K. joining as an independent member.”