This past weekend in Brussels British Prime Minister David Cameron finally ended the half-century- old British debate about whether it wants to be part of Europe or not. Cameron's conclusion, of course, was no.
This is not at all surprising as the Brits have never really had their hearts in the European project. When the European Economic Community (EEC or Common Market) was founded in 1958, Britain was invited to join. Its reply was "thanks, but no thanks." Then in 1972, when the Common Market looked like it was going to be a real success, London changed its mind and was admitted to membership claiming that the place of Britain was at the heart of Europe. But then began a long series of negotiations for special exceptions and conditions for the British, and in the internal debates, the weight of Britain was always thrown on the scales for less economic integration and for absolutely no political integration.
With the fate of the Euro and perhaps that of the European Union (EU) itself hanging in the balance and in the face of the agreement of all 26 of the other EU members on a plan for greater fiscal integration and discipline to combat the present European debt crisis, Cameron used his veto to stop the plan on the grounds that he had not been given sufficient exceptions from the rules to keep the financiers of the City of London happy. This, effectively prevents the other countries from going ahead with the plan and compels them to attempt to implement it through a cumbersome procedure of new treaty negotiation outside the institutions of the EU. In the end, it just may not be possible.
Of course, this doesn't technically mean the UK will be expelled from the EU. But it is difficult to imagine the rest of the EU including the UK in any serious discussions in the future. Thus, the question of wither Britain is very much to the fore.
I suggest that the United States, Canada, and Mexico invite Britain to join NAFTA. We could change its name from the North American Free Trade Area to simply the Northern Free Trade Area or the North Atlantic Free Trade Area. It would make all kinds of sense for Britain since its concepts of unfettered free markets and free trade are much closer to those of the North Americans than they are to the more regulation-oriented and mercantilist concepts of continental Europeans. Britain already does an immense amount of trade with North America and is the alternate center of operations for much of the North American financial industry. It obviously shares a common language with the United States and Canada and its biggest newspaper mogul owns the Wall Street Journal.
Then there is the matter of currency. The final stumbling block for Cameron was the unwillingness of his continental European partners to grant special exceptions that the City deemed necessary to maintain London's place as the world's premier hub of finance. Ironically, however, without really active membership in the EU, the City's future role will be quite uncertain. On top of that, in a world of big currencies like the dollar, the Euro, and, in the future, the Chinese yuan, a small currency like the pound sterling will likely find life increasingly difficult. This problem, however, would be easy to solve if the new Northern Free Trade Area were to adopt a common currency (U.S. dollar and Canadian dollar + Mexican Peso+ Pound Sterling = Dolep).
Of course, the Canadians and Mexicans might not go for this, in which case Washington could offer statehood to Britain, or separately to England, Scotland, Wales, and Northern Ireland. The U.S. flag would have either 51 or 54 stars and there would never again be any question of the Germans or French or the bureaucrats in Brussels calling the tune in London.
Best of all, this solution would give the United States more time zones than Russia.
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Clyde Prestowitz is the president of the Economic Strategy Institute and writes on the global economy for FP.