Business secretary Kemi Badenoch has signed off on the UK’s membership to a major Indo-Pacific trade bloc — which countries hope can maximise “post Brexit freedoms”.
Membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) brings British businesses a step closer to being able to sell to a market of around 500 million people with fewer barriers.
“If we don’t use it, then it’ll become a self-fulfilling prophecy,” she said.
“This is the fastest growing region. The Asia Pacific is going to be responsible for at least 50 per cent of global growth that we’re expecting between now and 2035.”
Prime Minister Rishi Sunak said joining the CTPPP demonstrated how the UK is able to take advantage of its “post-Brexit freedoms” to strike agreements that were not possible when it was in the EU.
However, critics say the impact of joining CTPPP will be limited, with official estimates suggesting it will add just £1.8 billion a year to the economy after 10 years, representing less than one per cent of UK GDP.
What is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership?
Eleven countries have combined to make a group that enjoys a free trade agreement.
The CPTPP covers virtually all sectors and aspects of trade, with its sole aim to reduce red tape, take down trade barriers, and facilitate trade business between member countries.
Between them, the club’s constituents are home to around 500 million people and generate more than 13 per cent of the world’s income.
The UK is now part of the biggest trade deal since Brexit – the CPTPP.
Here’s what you need to know🧵 pic.twitter.com/Zm1FRnbSsK
— UK Prime Minister (@10DowningStreet) July 16, 2023
When was the CPTPP formed?
It was first founded in 2018, with the core members being Australia, Canada, Japan, Mexico, New Zealand, and Singapore.
In 2019, Vietnam joined, as did Peru in 2021. Malaysia joined in 2022, while Chile signed up in February 2023.
Which countries are members of the CPTPP?
The other members of the CPTPP are Australia, Canada, Japan, Mexico, New Zealand, Singapore, Brunei, Chile, Malaysia, Peru, and Vietnam.
Why did the UK want to join the CPTPP?
The UK Government wanted to seal a trade deal now it is outside the European Union.
The Government has said joining CPTPP will add even “more economic clout to this exciting and dynamic trade alliance” and allow the country to grow financially while strengthening “our bilateral trade relationships with Vietnam, Malaysia, and Singapore — which total £32bn”.
While Britain already has trade agreements with the CPTPP members apart from Malaysia and Brunei, officials said it will deepen existing arrangements, with 99 per cent of current UK goods exports to the bloc eligible for zero tariffs.
“What we should be doing is praising the effort it has taken to get us into this regional bloc,” Ms Badenoch told Sky News upon the membership being agreed. “I remember a few years ago people in the UK were laughing, saying this would never happen.”
She added that the deal proves the UK is not “isolated”.
“The UK is looking outwards, we are not an insular country. We have a seat at the table.”
However, she did admit that the chances of a free trade deal with the US are “very low”.
What has Labour said about CPTPP membership?
With the Conservatives trailing Labour in the polls ahead of an expected general election next year, it is unclear whether the next government will focus as much on the Indo-Pacific as it does on mending Brexit-battered ties with the European Union.
Shadow foreign secretary David Lammy last month said the Tories were being “dishonest” by claiming CPTPP membership would make up for lost trade in Europe.