The UK has signed a trade deal to join a trade pact with 11 Asian and Pacific nations, three years after it officially left the European Union. After signing the trade deal, there will be a boost in UK exports due to the cutting of tariffs on goods such as cheese, cars, chocolate, machinery, gin, and whisky. However, according to the government’s own estimate, it will only be a 0.08% boost to the economy after the trade deal, despite covering a market of around 500 million people.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, was established in 2018 and includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The membership allows for a loosening of restrictions on trade between members and reduced tariffs on goods.
The UK government has called this the biggest trade deal after Brexit after 21 months of negotiations, making the UK the first European country to join. The deal has 11 members which account for about 13% of the world’s income. The UK already has existing trade deals with all of the members except for Brunei and Malaysia, and they all demonstrate the real benefits of post-Brexit freedoms. As a part of CPTPP, the UK is in a prime position to seize opportunities for new jobs, innovation, and growth. British business will tap markets in the South Pacific and Europe.
UK’s Business and Trade Secretary, Kemi Badenoch, compared the CPTPP agreement to ‘buying a start-up’ and explained that the deal does not aim to replace trade with the EU but to complement it, as the UK has an existing free trade agreement with the EU. As per Badenoch, the long-term potential of the CPTPP is of grave importance, as the region will eventually account for 40% of the world’s middle class in the next seven years. She also dismissed concerns that the deal would have no negative effects on UK agriculture but rather create new markets for the farmers. The Opposition’s shadow international trade secretary, Nick Thomas-Symonds, called the UK’s entry into the CPTPP “encouraging,” but raised questions about its potential impact on consumer safety, food safety, data protection, and environmental protections.
In addition to tariff reductions, the UK government has outlined other benefits of joining the CPTPP, including a boost to the services sector. UK firms will no longer be required to establish a local office or maintain a local presence to provide services within the bloc. This means that British businesses will be on an equal footing with local firms in CPTPP countries.
After securing membership in the CPTPP, the British government and the other members will undertake the final legal and administrative steps required to formally sign the agreement in 2023. This will further solidify the UK’s position as an influential player in the global economy while providing new opportunities for British businesses and consumers in the post-Brexit era.
