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UK Government signs off membership to major Indo-Pacific trade bloc

16 Jul 2023 6 minute read
Kemi Badenoch. Photo Victoria Jones/PA Wire

The UK Business and Trade Secretary has signed off membership to a major Indo-Pacific trade bloc, bringing businesses a step closer to being able to potentially sell to a market of 500 million people with fewer barriers.

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.

It represents the 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.

The signing is the formal confirmation of the agreement for the UK’s membership, which was reached in March after two years of negotiations.

Work will now begin work to ratify the deal, which in the UK will involve parliamentary scrutiny and legislation to bring it into force.

Officials estimate it will come into force in the second half of 2024, at which point the UK becomes a voting member of the bloc and businesses can benefit from it.

Exciting

Before putting pen to paper in Auckland alongside ministers from CPTPP nations, Ms Badenoch said: “I’m delighted to be here in New Zealand to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.

“We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.”

While most of the details were agreed earlier this year, the terms and conditions of the UK’s membership will be published on Sunday.

That includes the commitments the UK is making to other nations on market access.

To coincide with the signing, the Government released figures showing that CPTPP-headquartered businesses employed one in every 100 UK workers in 2019, amounting to more than 400,000 jobs across the country.

Membership of the trade group is expected to bolster that investment relationship.

While existing trade agreements are in place with all CPTPP members apart from Malaysia and Brunei, officials said the deal will deepen existing arrangements, with 99% of current UK goods exports to the bloc eligible for zero tariffs.

Dairy producers will gain export opportunities to Canada, Chile, Japan and Mexico, while beef, pork and poultry producers will get better access to Mexico’s market, according to officials.

Critics

But critics say the impact 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.

The deal represents a continuation of the post-Brexit policy “tilt” towards the Indo-Pacific, which is expected to be home to around half the world’s middle-class consumers by 2035.

With the Conservatives trailing Labour in the polls ahead of an expected general election next year, it is unclear whether the next government will focus as much on the Indo-Pacific as it does on mending Brexit-battered ties with the European Union.

Shadow foreign secretary David Lammy last month said the Tories were being “dishonest” by claiming CPTPP membership would make up for lost trade in Europe.

Officials herald the CPTPP as an alternative to the beleaguered World Trade Organisation in an increasingly fragmented international trading system.

HSBC chief executive Ian Stuart said: “The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation and technology.”

Some of the everyday items from CPTPP nations that will become cheaper for UK consumers thanks to the deal include Australian Ugg boots, kiwis from New Zealand, blueberries from Chile and Canadian maple syrup, according to the Institute of Export and International Trade.

Its director general Marco Forgione said: “From whiskey to confectionery to cars to jewellery and clothing, the removal of tariffs will make our finest British products more readily available to consumers in the Indo-Pacific bloc.

“This agreement has the additional benefit of strengthening the value chains and supply chains within the bloc.

“Since the UK announced its intention to join CPTPP, many other countries are now looking to join. Which means the potential market access and benefits will continue to significantly increase in the coming years.”

After the UK’s accession, attention may shift to other potential new members, with applications by China and Taiwan likely to cause tensions.

Conservation campaigners and trade unions said the deal would enable trade in environments that damage the environment and poses risks for workers.

Angela Francis, director of policy solutions at conservation group WWF-UK, said the Government was “knowingly enabling trade in products that are wreaking havoc on our natural world.”

‘Bad for workers’

Paul Nowak, general secretary of the TUC, said the agreement could lead to profits for multinational corporations being prioritised over policies like an increase in the minimum wage and bringing energy into public ownership.

“This Pacific trade pact is bad for workers at home and abroad. Once again, Conservative ministers have turned a blind eye to egregious human and workers’ rights abuses in their pursuit of trade deals,” he said.

But the move was welcomed by the British Chambers of Commerce, which said accession would be “good news for UK businesses”.

William Bain, head of trade policy at the BCC, said: “The forthcoming addition of the UK to this trading bloc takes it to 12 countries which accounts for 15% of global economic output.

“It will open up new opportunities for our businesses in both inward and external investment with the other 11 countries from the second half of next year.”


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Steve A Duggan
Steve A Duggan
10 months ago

Yippee! A trade deal with countries thousands of miles away when we are still at logger heads with one of the biggest trading blocks in the world only 23miles away! Warped ideology at it’s very best!

hdavies15
hdavies15
10 months ago
Reply to  Steve A Duggan

.. at a time when issues like food miles become more important we talk of shipping food to and from all these remote places. It’s utter bollox. Half that expenditure could be redirected into the internal UK?Wales food/agri/horticulture sectors cutting food miles at a stroke. The other half could be absorbed by countries like Netherlands as long as their silly government ditches its daft misguided anti-agri stance.

Cathy Jones
Cathy Jones
10 months ago

Despite being Very Left My Guy on the political spectrum, I get that trade is important. Because goods are good, “I will trade you some of my stuff for some of yours” has been a long trusted way to get cool gear and meet new people and discover new ways….. …and it is in this spirit, that putting aside my general loathing for Capitalism*, I am hoping that we can embrace trading with other countries and blocs….now, is there some other place we could be trading with? Because as much as I love a creepy-sounding acronym that sounds like the… Read more »

Fi yn unig
Fi yn unig
10 months ago

The ship on which we sail is being deliberately steered into the stormy unknown by hijackers on the bridge whilst we cower below deck in fear of imminent drowning. All we need to do before the storm hits and the ship sinks is launch the lifeboat ‘Independence’ and return once again to be with our nearest friends on the neighbouring continent where we can restore our previous collaborative relationship whilst mourning the entirely unnecessary loss of the vessel we had to abandon.

Welsh_Siôn
Welsh_Siôn
10 months ago

Its director general Marco Forgione said: “From whiskey to confectionary to cars to jewellery and clothing, the removal of tariffs will make our finest British products more readily available to consumers in the Indo-Pacific bloc. __________ I see the Scots lose out – again. And twice. Not only will the Irish be celebrating the exporting of their ‘whiskEy’ thanks to this deal, the Scots have their produce lumped together with ‘British’ goods. And as for poor Cymru. No mention at all, of course. Incidentally, is ‘confectionAry’ something sweet that doesn’t move (i.e. is ‘stationAry’) or something sweet (‘confectionEry’) which is… Read more »

Alwyn Evans
Alwyn Evans
10 months ago

What are we signing away THIS time?

Fi yn unig
Fi yn unig
10 months ago
Reply to  Alwyn Evans

Not sure but in their desperation to show they can get post Break-it trade deals, it’s probably like the Australia one which is known to be good for Oz and bad for us.

Y Cymro
Y Cymro
10 months ago

More Conservative CPTTP claptrap. Oh, sure. I can foresee Wales selling its lamb products to the likes of Australia & New Zealand, but first we have got to lower our standards to zero. Pollute further our rivers & sea with animal slurry. Pump our lambs full of hormones to produce more yield. Then stick pack them on their long 11,000+ miles journey carbon emitting journey to super-ranch Australia & New Zealand where their lamb will stand idle on their fields because we Welsh are now in town. What a bloody farce seeing we had a 500 million marketplace already on… Read more »

Mawkernewek
10 months ago

How are they going to relocate the UK to its new location in the Pacific? Are we going to tuck in under Alaska next to western Canada or be in the southern hemisphere next to New Zealand.
If the latter will Britain get rotated around so Scotland is still at higher latitudes?

Gareth
Gareth
10 months ago

This deal is said will boost the economy by £1.8 billion over 10 years, or 10x what Arsenal FC have spent in the current transfer window, while the centre for economic reform says the UK Gov has lost over £40 billion in taxes due to the effects of brexit. Seem like a good deal ? It beegars beliefe that the UK press are allowed to print “£12 Trillion deal” on the front page when that figure is the total GDP of all countrys in the pact not the benefit to the UK.

Last edited 10 months ago by Gareth
Nobby Tart
Nobby Tart
10 months ago
Reply to  Gareth

£1.8 billion is the current estimated cost of rerouting the A303 through a tunnel by Stonehenge.
This project has just been approved.

Richard Cork
Richard Cork
10 months ago

I know a better trading bloc that is much closer to home, the European Single Market. They are geographically much closer and will always be our biggest trading partners, plus there won’t be any border issues with Ireland. Leaving the single market was never on the ballot paper in 2016
Furthermore if joining the CPTPP is a victory for Brexit then why did their beloved Trump pull out of it?

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