British Prime Minister Rishi Sunak. File
| Photo Credit: Reuters
The U.K., on March 31, 2023, acceded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with Prime Minister Rishi Sunak describing the outcome as an example of “post-Brexit freedoms”. The agreement will now need to be ratified by Westminster and each of the CPTPP countries.
“We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms,” Mr Sunak said about the U.K.’s move to join the 11-member Asia-Pacific trading bloc, which, without the U.K. accounts for some 13% of global GDP . Talks had been on-going for 21 months.
The British government said the deal would mean that more than 99% of British exports — including for key markets such as cheese, cars, chocolate, machinery, gin and whisky — would have zero tariffs. It also claimed that the deal would add GBP 1.8 billion (USD 2.2 billion) annually to the U.K. economy in the long run. This, however, translates to a modest boost of 0.08% to GDP .
The government said the deal was a “gateway” to the Indo-Pacific region which would account for a majority (54%) of global economic growth in the future.The U.K. is currently also negotiating a “free trade” deal with India. It will also, as a CPTPP member, get a veto on whether China joins the treaty. Beijing had applied to become a member of the bloc in September 2021. The U.S. , in the Donald Trump presidency, had withdrawn from the CPTPP’s predecessor, the TPP.
Downing Street highlighted some of the benefits of the CPTPP — such as a cut in whisky and car tariffs for British goods going to Malaysia. Services — which are a key U.K. export — accounted for 43% of exports to CPTPP countries last year, Downing Street said. Once Britain becomes a member of the bloc, U.K. firms will not need to establish a local office or be resident to provide services and will be able to operate on a par with firms in host countries, the government said.
The U.K. already has bilateral trade agreements with some other treaty countries such as Australia and Japan – and the benefits of the UK joining CPTPP is likely to be limited in these cases.
Questioned by Times Radio on whether the impact of joining CPTPP would make up for the economic loss of leaving the EU, the U.K.’s international trade secretary Kemi Badenoch, suggested it was time to move the debate on from Brexit.
“ We’ve left the EU so we need to look at what to do in order to grow that UK economy and not keep talking about a vote from seven years ago, “ she said.
