Britain reaches agreement to join trans-Pacific trade pact
South China Morning Post
4 min read
Britain reached an agreement to join an 11-member trans-Pacific trade pact on Friday, an important milestone in its efforts to build new trading partnerships since its exit from the European Union three years ago and to play a larger role in the Indo-Pacific region.
After British officials hinted a deal was close this week, UK Prime Minister Rishi Sunak confirmed in the early morning hours in London on Friday that a deal had been reached to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Britain is expected to formally sign the trade pact, following a legal review, later this year.
"We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms," Sunak said. "As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation."
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The deal makes Britain the first European and non-founding member to join the trade pact since it was formed in 2018 and follows two years of negotiations by British trade officials.
Other members of the trade agreement are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.
China formally applied to join the trade pact in September 2021 and pledged last October to continue reforms as part of an effort to join the free trade agreement. Former US president Donald Trump withdrew from its predecessor, the Trans-Pacific Partnership (TPP), soon after taking office in 2017.
British officials estimate joining the CPTPP could boost the UK economy by £1.8 billion (US$2.2 billion) in the long run.
"The benefits of UK accession for British businesses are clear: modern data and digital standards, significant tariff reductions and enhanced access to some of the world's most dynamic markets," Saif Malik, the CEO of Standard Chartered's UK business and its regional head for client coverage in the UK and Europe, said.
Total British exports to CPTPP-member countries were £60.5 billion for the 12 months ended in September 2022, with government officials expecting those exports to increase after joining the trade pact.
"Not only does the agreement provide greater access to a group of fast growth economies representing 14 per cent of global GDP [gross domestic product] and over 500 million consumers, but membership reinforces the UK's commitment to building partnerships in an increasingly fragmented world," Matthew Fell, interim director of the Confederation of British Industry, a trade group, said.
More than 99 per cent of UK exported goods exports to will be eligible for zero tariffs, including cheese, automobiles and whisky, British officials said.
"Joining CPTPP will support jobs and create opportunities for companies of all sizes and in all parts of the UK," British Business and Trade Secretary Kemi Badenoch said. "It is about giving British businesses improved access to the countries that will be gateway to the wider Indo-Pacific region which is projected to make up the majority of global growth in the future."
The agreement also comes as the UK is seeking to play a much larger role in the Indo-Pacific region amid rising tensions with Beijing.
US President Joe Biden and British Prime Minister Rishi Sunak in San Diego, California, on March 13, 2023. Photo: Bloomberg alt=US President Joe Biden and British Prime Minister Rishi Sunak in San Diego, California, on March 13, 2023. Photo: Bloomberg>
The UK joined the trilateral Aukus military alliance alongside the United States and Australia in September 2021, as a check on China's growing influence in the region. Earlier this month, the three countries agree to jointly develop nuclear-powered submarines together as part of the alliance, which has stoked Beijing's ire.
In December, Foreign Secretary James Cleverly called for Britain to establish deeper relationships with traditionally non-aligned countries in Asia and other parts of the world and take a longer-term view of diplomacy as it engages in a "multi-decade competition" to protect the values that have led to peace and prosperity globally.
In January, Britain and Japan signed a major defence agreement that will make it easier for the two nations to engage in joint military exercises and deploy troops to each other's countries. Last year, Britain agreed to develop the next generation of jet fighters with Japan and Italy.
In an update of its defence and diplomatic strategy this month, British officials said that the Chinese Communist Party's policies provide a "systemic challenge with implications for almost every area of government policy and the everyday lives of British people".
"Our preference is for better cooperation and understanding, and predictability and stability for global public good," the so-called integrated review said. "But we believe that this will depend on the choices China makes, and will be made harder if trends towards greater authoritarianism and assertiveness overseas continue."
