LONDON: The UK government on Sunday (Jul 16) announced it had formally signed a treaty to join a major Indo-Pacific bloc, as it looks beyond Europe for trading opportunities post-Brexit.
Business and Trade Secretary Kemi Badenoch signed the accession protocol for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand.
It makes the United Kingdom the first new member and the first European nation to join the bloc since it was created in 2018.
The CPTPP comprises fellow G7 members Canada and Japan, plus the UK’s long-standing allies Australia and New Zealand, alongside Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam.
Minister for Trade and Industry Gan Kim Yong represented Singapore at the commission meeting, where ministers from different countries welcomed the UK as the CPTPP’s newest member.
Mr Gan said on Sunday: “The entry of the UK into the CPTPP is an important milestone for our agreement that will benefit all members through access to the large UK market.”
He said the UK stands to gain from becoming further integrated into “one of the most dynamic trading areas in the world”, and would increase the size of CPTPP to 15 per cent of the global gross domestic product (GDP).
“I welcome the UK’s membership and look forward to strengthening our robust and longstanding economic relationship with the UK through the CPTPP.”
According to 2022 data from the World Bank, the UK’s membership will see an increase in the CPTPP’s GDP from 12.1 per cent of global GDP to 15.4 per cent.
The CCPTPP has been seen as a bulwark against Chinese dominance in the region, although Beijing has applied to join.
London has been pushing a “Global Britain” strategy since formally severing nearly 50 years of ties with its nearest neighbours in the European Union three years ago.
Sunday’s signing – the formal confirmation of the agreement for UK membership of the CPTPP after nearly two years of talks – will be the UK’s biggest trade deal since Brexit.
The government said it will cut tariffs for UK exports to CPTPP countries, which with UK membership will have a combined GDP of £12 trillion (US$15.7 trillion), and account for 15 per cent of global GDP.
The agreement is expected to come into force in the second half of next year, after parliamentary scrutiny and legislation.
Badenoch called the deal “a big boost for British businesses”, opening up opportunities for trade to a market of more than 500 million people and access to the wider region.
“We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country,” she said.
UK accession to the CPTPP – the successor to a previous trans-Pacific trade pact that the United States withdrew from in 2017 under president Donald Trump – has been met with a mixed reception.
For Brexit supporters, it has been seen as a chance for the UK to join other trading blocs with faster-growing economies than those closer to home – and boost the country’s international geopolitical and economic clout.
But critics say it will struggle to compensate for the economic damage sustained by leaving the 27-member EU – the world’s largest trading bloc and collective economy.
Analysts estimate the eventual UK economic boost is £1.8 billion (US$2.2 billion) – a 0.08 per cent annual GDP increase.
The government’s spending watchdog, the Office for Budget Responsibility, in April, forecasted that London’s Brexit deal with Brussels will reduce long-term productivity by 4.0 per cent compared to when the UK was a member.
At the meeting, Mr Gan said the UK’s accession would “enhance the economic heft” of the agreement and “bring new market access opportunities” for CPTPP’s members.
He also said it was important to “build on this momentum” to ensure that the CPTPP remains an open and inclusive agreement to aspirant economies willing and able to meet its high standards.
Mr Gan added that it was vital for members to work together to “review and enhance the implementation” of the agreement to ensure it remains as the benchmark for trade agreements.
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