It makes the United Kingdom the first new member and first European nation to join the bloc since it was created in 2018…reports Asian Lite News
The government on Sunday hailed what it said was its biggest trade deal since Brexit, as it formally signed a treaty to join a major Indo-Pacific bloc.
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 first European nation to join the bloc since it was created in 2018.
The CPTPP comprises the UK’s fellow G-7 members Canada and Japan, plus long-standing allies Australia and New Zealand, alongside Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam.
It has been seen as a bulwark against Chinese dominance in the region, although Beijing has applied to join.
Badenoch said in an interview with Sky News that the deal showed the UK “looking outwards towards the world”. “We have a seat at the table in the fastest-growing region, countries are queuing up (to join),” she added.
“I’m really excited that we’ve brought home the biggest trade deal since we left the European Union.”
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 at a CPTPP meeting in Auckland was the formal confirmation of the agreement for UK membership after nearly two years of talks.
The government said it will cut tariffs for UK exports to CPTPP countries, which with U.K. membership will have a combined GDP of £12 trillion ($15.7 trillion), and account for 15% of global GDP.
It will give British businesses trade access to a market of more than 500 million people and access to the wider region, it added.
The agreement is expected to come into force in the second half of next year, after parliamentary scrutiny and legislation. 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, however, 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.
The UK already has trade deals with 10 of the 11 other CPTPP members, and analysts estimate the eventual economic boost to the country is £1.8 billion ($2.2 billion) — a 0.08 percent annual GDP increase.
The government’s spending watchdog, the Office for Budget Responsibility, in April forecast that London’s Brexit deal with Brussels will reduce long-term productivity by 4.0 percent compared to when the UK was a member.
A key UK government pledge to sign a prized free-trade deal with the United States remains elusive, and Badenoch assessed the chances of securing one currently were “very low”.
“It all depends on the administration… Lots of countries have been looking to have a free trade agreement with the US, including us, but for now, they’ve said that’s not something that they want to do,” she added.
In the absence of a deal, the UK has signed trade agreements with US states North Carolina, South Carolina and Indiana.
It is also seeking closer trading partnerships with US powerhouses California and Texas, and is in discussions with Utah and Oklahoma.
The deal represents a continuation of the post-Brexit policy tilt towards the Indo-Pacific, which is expected to be home to about half the world’s middle-class consumers by 2035. The UK already has free trade deals with nine of the 11 member states of the CPTPP, many of which were rolled over from when it was a EU member.
With Labour ahead in the polls, it is unclear whether the next government will focus as much on the Indo-Pacific as it does on mending the battered ties with the EU.
Britain is the first new member to join the CPTPP since its formation in 2018. It is also the first European country to gain entry to the bloc, which comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The deal represents Britain’s biggest trade agreement since leaving the EU, cutting tariffs for UK exporters to a group of countries that will have a combined GDP of £12tn, about 15% of global GDP, according to officials.
The Office for Budget Responsibility has estimated that Brexit will reduce Britain’s GDP by 4% over 15 years from 2016, wiping about £100bn from the economy.
Goods including Australian Ugg boots, kiwifruit from New Zealand, blueberries from Chile and maple syrup from Canada will all now become cheaper for UK consumers, according to the Institute of Export and International Trade.
Analysts raised doubts about the significance of the deal. “The impact appears mainly cosmetic, for the UK to show it made a trade deal after Brexit,” Chris Devonshire-Ellis, the chair of the investment advisory firm Dezan Shira & Associates, told Nikkei Asia. “No one in Asia is taking the pact very seriously.”