Britain could join a formal trade alliance with the US, Canada and Mexico if Britain is unable to secure a post-Brexit deal with the EU under plans being considered by ministers.

The Telegraph understands that the Government is examining the possibility of joining the North American Free Trade Agreement, known as Nafta, as part of its planning for a “no deal” scenario.

Joining Nafta would enable the UK to boost its trade with three of the world’s economic powerhouses, which have a combined Gross Domestic Product (GDP) of £17.2 trillion, compared with the EU’s GDP of £15.7 trillion.

Together, Britain, the US, Canada and Mexico account for more than 30 per cent of the entire global economy.

Joining Nafta would give British importers and exporters better access to the US, Canada and Mexico without the UK having to go through painstaking negotiations to strike a new free trade agreement with each nation individually.

It would also mean three of the G7 nations - Britain, the US and Canada - being part of the same formal trading alliance, giving them huge political influence.