LONDON: The UK government celebrated its largest trade deal since Brexit on Sunday as it officially signed a treaty to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major Indo-Pacific trading bloc.
Business and Trade Secretary Kemi Badenoch signed the accession protocol for the CPTPP in New Zealand, making the United Kingdom the first new member and first European nation to join the bloc since its establishment in 2018.
The CPTPP includes Canada and Japan, both fellow G7 members, along with Australia, New Zealand, Brunei, Chile, Malaysia, Mexico, Peru, Singapore, and Vietnam. It has been viewed as a counterbalance to Chinese influence in the region, although China has also applied for membership.
Badenoch emphasized that the deal demonstrated the UK’s commitment to global engagement, stating in an interview with Sky News that the country now had a seat at the table in the fastest-growing region. She expressed excitement over securing the “biggest trade deal” since the UK’s departure from the European Union.
Since officially leaving the EU three years ago, the UK has pursued a “Global Britain” strategy, focusing on expanding its international relationships. The signing of the CPTPP membership at a meeting in Auckland confirmed the agreement after nearly two years of negotiations.
Deal to Reduce Tariffs for UK Exports to CPTPP Countries
According to the UK government, the deal will reduce tariffs for British exports to CPTPP countries, which collectively have a GDP of £12 trillion ($15.7 trillion) and account for 15 percent of global GDP. The deal will provide British businesses with access to a market of more than 500 million people and broader regional opportunities.
The CPTPP accession has received mixed reactions. Supporters of Brexit see it as an opportunity for the UK to join trading blocs with faster-growing economies and enhance its international influence. However, critics argue that it will struggle to compensate for the economic consequences of leaving the EU, the world’s largest trading bloc.
Although the UK already has trade agreements with 10 of the 11 CPTPP members, analysts estimate that the eventual economic boost from membership will be around £1.8 billion ($2.2 billion), equating to a 0.08 percent annual GDP increase. The Office for Budget Responsibility has forecasted a 4.0 percent reduction in long-term productivity due to the UK’s Brexit deal with Brussels.
The UK government’s pursuit of a free-trade agreement with the United States remains uncertain, with Badenoch stating that the chances of securing one currently are “very low.” The UK has signed trade deals with several US states, including South Carolina, North Carolina, and Indiana. It is also engaged in discussions with California, Texas, Utah, and Oklahoma to establish closer trading partnerships.
