After sealing free trade agreements with New Zealand and Australia in May 2023, the UK is set to sign a Pacific trade deal in Auckland next weekend. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is strategic for Britain, allowing it to strengthen economic ties with Asia in China’s playing field. This is Britain’s biggest trade deal since Brexit, making the UK, the first European nation to join the Trans-Pacific Partnership.
The CPTPP unlocks access to a region with a total GDP of $13.6 Trillion. UK prime minister Rishi Sunak says the deal will put the United Kingdom at the center of a dynamic and growing group of Pacific economies. It demonstrates the real economic benefits of Britain’s post-Brexit freedoms. Through this deal, British businesses can enjoy unparalleled access to markets from Europe to the South Pacific.
Golden Opportunity
Britain will reap benefits from reduced tariffs on export of food, drink and cars, and boost its economy by £1.8 Billion in the long term. This progressive deal helps Britain reach out to new markets around the world to grow its own economy. Natalie Black, UK’s trade commissioner for Asia Pacific, explained the deal is about economic performance. She said this is the part of the world that is going to drive economic growth, and drive the rules of the road of trade going forward.
The CPTPP involves 11 countries in the Asia-Pacific region, including Australia, New Zealand, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, and Vietnam. These economies account for about 13 percent of the world’s GDP, worth up to $10.6 Trillion.
Damien O’Connor, New Zealand’s minister for trade and export growth, said the UK’s membership of CPTPP sits alongside its bilateral Free Trade Agreement to ensure that Kiwi exporters have unprecedented access to the sixth largest economy in the world.
China is Also to Join
Beijing applied to join the CPTPP in 2021, but has seen little to no progress. As such, it has been ramping efforts to promote higher-level openness, despite economic headwinds brought by COVID-19 and global geopolitical uncertainties. Wang Shouwen, China’s Vice Commerce Minister, said they are willing to join the free trade pact and are advancing efforts. He shared that China has conducted in-depth research on all the terms of the CPTPP and assessed the costs and benefits by joining the partnership.
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The minister highlighted that China has already carried out pilot projects and experiments in some pilot free trade zones and free trade ports in accordance with the requirements of CPTPP rules, standards, and management obligations.
It should be noted that the U.S. was also a member of the CPTPP but Donald Trump pulled out of the agreement in 2017. The U.S had wanted to maintain trade dominance in Asia but it was without any benefits. At the end of the day, the trade pact was just about diplomacy and no benefits.
