Mixed reception to UK’s plan to join trans-Pacific trade pact

LONDON: The UK’s announcement that it will soon join 11 other countries in a major Asia-Pacific trade partnership—the country’s biggest post-Brexit trade deal to date—earned a mixed reception on Friday. Britain will be the first new member since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was created in 2018, and the first European country in the bloc.

The trade grouping will include more than 500 million people and account for 15 percent of global gross domestic product once the UK becomes its 12th member, according to Prime Minister Rishi Sunak’s office. It said Britain’s accession—after 21 months of “intense negotiations”—puts the country “at the heart of a dynamic group of economies” and is evidence of “seizing the opportunities of our new post-Brexit trade freedoms”. The development fulfils a key pledge of Brexit supporters that, outside the European Union, the UK can capitalize on joining other trade blocs with faster-growing economies than those closer to home.

But others have noted that such ventures will struggle to compensate for the economic damage sustained by leaving the EU, the world’s largest trading bloc and collective economy. “The impact on the UK economy from the UK joining the CPTPP will probably be fairly small,” said Ashley Webb, of Capital Economics. “Having said that, it may help to improve UK international relations and other countries’ perceptions of the UK as a trading partner.” ‘Strategic’ The CPTPP is the successor to a previous trans-Pacific trade pact that the United States withdrew from in 2017 under former President Donald Trump.

Its members include fellow Group of Seven members Canada and Japan, and historic UK allies Australia and New Zealand. The remaining members are Chile, Mexico and Peru, along with Brunei, Malaysia, Singapore and Vietnam. Despite rising geopolitical tensions, in particular with Canberra, China formally applied to join the bloc in 2021. All existing members must reach a consensus for a new country to enter the CPTPP. London is set to formally join later this year following nearly two years of talks. In Tokyo, Japanese government spokesman Hirokazu Matsuno welcomed the expansion.

“The UK is a global strategic partner and also an important trading and investment partner,” he told reporters. Its accession “will have great meaning for forming a free and fair economic order”, he added. Matsuno said Japan would need to examine whether China and any other nations hoping to join can meet the required conditions, and would also consider the “strategic viewpoint” and Japanese public opinion. In Britain, two hawkish former leaders of Sunak’s ruling Conservatives said London should use its membership to block Beijing’s bid.

“It’s essential that any idea of Chinese accession is ruled out (and) I’d expect the British government to oppose any such proposal,” former prime minister Liz Truss tweeted. ‘Longer-term benefits’ Since Britain quit the EU’s single market in 2021, it has been trying to strike bilateral deals to boost its international trade—and flagging economy. It has so far inked agreements with far-flung allies including Australia, New Zealand and Singapore, and is in talks with India and Canada. However, a prized pact with the United States remains stalled.

King’s College London economist Jonathan Portes noted the CPTPP was not a “deep multilateral agreement” like its predecessor or the EU, so its impacts in lowering trade barriers would be “quite small”. “Joining CPTPP may have longer-term benefits, both economic… and geopolitical,” he told AFP. “But of course you can’t directly quantify those at this point.” Analysts estimate the eventual UK economic boost is £1.8 billion ($2.2 billion) — a 0.08 percent annual GDP increase. Meanwhile, the Office for Budget Responsibility has forecast Brexit will reduce long-term UK growth by about 4 percent.

Scotland’s devolved government, which wants to join the EU as an independent country after leaving the UK, seized on the difference. “It is clear that this agreement will not make up for the damaging impact of the UK leaving the EU and forfeiting access to the European single market,” its trade minister Richard Lochhead said. However, the National Farmers Union was among those to applaud the deal, saying it “could provide some good opportunities to get more fantastic British food on plates overseas”. – AFP

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