Minister raises concerns over new UK agreement with Indo-Pacific trade bloc
Wales’ Economy Minister Vaughan Gething has expressed concern over the UK Government’s sign off on a new trade agreement with a major Indo-Pacific trade bloc.
The UK Business and Trade Secretary Kemi Badenoch signed the accession protocol to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand on Sunday.
The UK is the first new member and first European nation to join the bloc – comprising Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – since its formation in 2018.
The deal represents the UK government’s biggest trade deal since leaving the EU, cutting tariffs for UK exporters to a group of nations which – with UK accession – will have a combined gross domestic product (GDP) of £12 trillion, accounting for 15% of global GDP, according to officials.
But critics of the tie-up say the impact of the agreement will be limited, with official estimates suggesting it will add just £1.8 billion a year to the economy after 10 years, representing less than 1% of UK GDP.
According to latest data cited by Mr Gething, the value of goods trade between Wales and CPTPP members was £2.7bn in the year ending March 2023, of which imports and exports made up £1.4bn and £1.3bn respectively.
Around 6.1% of Wales’ total goods exports were destined for CPTPP member countries during this time.
In his response to Sunday’s signing, the minister said: “This agreement marks a shift in the UK’s trade policy towards the Indo-Pacific region, signifying the region’s increasing importance.
However, it is important to remember that the majority (around 57.2%, £12bn) of Wales’ goods exports continue to be destined for the EU market.
“Whilst we understand why the UK Government might have assigned such importance to this trade deal, it is vital that we ensure it is fully compatible with the deal we now have with the EU and must not harm the UK/EU trading relationship or set a precedent for future trade deals with other trading partners.
“We have always been broadly supportive of the UK Government’s free trade agenda and of the potential benefits new Free Trade Agreements could bring to Wales. However, CPTPP is significantly different from the bi-lateral negotiations that the UK has undertaken to date.
“CPTPP is an existing plurilateral agreement, and it has been up to the UK Government to demonstrate compliance with the terms of CPTPP rather than negotiate new provisions.
It is also worth noting that the UK Government has already signed, or is already negotiating, bi-lateral trade agreements with many CPTPP members, such as Japan, Australia, New Zealand, Canada and Mexico.
We have always had, and continue to have, concerns with certain elements of the existing agreement and the level of ambition in some of the CPTPP chapter text.
“Now that the agreement has been signed, and the UK Government has published its impact assessment, my officials will complete a full report detailing our perspective on the UK’s accession. This will be published in due course.
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