UK will apply to join CPTPP

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UK will apply to join CPTPP

The UK will apply to join a free trade area CPTPP with 11 Asia and Pacific nations on Monday, a year after it officially left the EU.

Joining the group of “fast-growing nations” will boost UK exports, the government says.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership – or CPTPP – covers a market of around 500 million people.

But they are harder to reach than neighbouring markets in Europe.

UK applying to join free trade pact CPTPP

Members include Australia, Canada, Japan and New Zealand.

Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam are also founder members of the bloc, which was established in 2018.

Joining the bloc would reduce tariffs on UK exports such as whisky and cars, as well as service industries, she said.

However the immediate impact is likely to be modest as the UK already has free trade deals in place with several CPTPP members, some of which were rolled over from its EU membership. The UK is negotiating deals with Australia and New Zealand.

In total, CPTPP nations accounted for 8.4% of UK exports in 2019, roughly the same proportion as Germany alone.

Exactly a year after it said goodbye to the EU, the UK will apply to join a free trade CPTPP and is eying a new trading club.

It sounds a win-win: those Pacific Rim nations represent 13% of global income and 500 million people – and the UK would retain the freedom to strike deals elsewhere. There’d be agreement on how standards and regulations are set (with minimums to be adhered to) – but they wouldn’t need to be identical.

In practice, however, the short-terms gains for households and business would be limited. The UK already has trade deals with seven of the 11 nations – and is pursuing two more. In total, CPTPP nations account for less than 10% of UK exports, a fraction of what goes to the EU.

This deal would however deepen some of those ties – and allow UK manufacturers who source components from multiple nations in the bloc some benefits under “rules of origins” allowances.

But the real boost could come in the future, if others join – in particular the US, as President Biden has hinted. That would give the UK that hoped-for trade deal with America – within a trading bloc wielding considerable power on the global stage.

Source: BBC