LONDON • Britain yesterday began negotiations to join a trans-Pacific trade deal that it sees as crucial to its post-Brexit pivot away from Europe and towards geographically more distant but faster-growing economies.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) removes 95 per cent of tariffs between its 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Britain hopes to carve out a niche for itself in world trade as an exporter of premium consumer goods and professional services. Accession to the pact would supplement trade deals London is seeking, or has already agreed, with larger members.
"This part of the world is where Britain's greatest opportunities lie. We left the EU with the promise of deepening links with old allies and fast-growing consumer markets beyond Europe," trade minister Liz Truss said. "It is a glittering post-Brexit prize that I want us to seize."
The CPTPP is forecast to lead to only a minimal gain in British exports or economic growth.
But it locks in market access, including for the legal, financial and professional services sectors, and is seen by ministers as an important way to gain influence in a region where China is increasingly the dominant economic force.
Joining the CPTPP in its current format could add around £1.8 billion (S$3.4 billion) to the economy over the long term - less than 0.1 per cent of pre-pandemic gross domestic product (GDP), according to British government modelling published yesterday.
That gain could rise to £5.5 billion - or 0.25 per cent of GDP - if Thailand, South Korea and the United States were also to join the bloc.
Unlike the European Union, the CPTPP does not impose laws on its members, nor does it aim to create a single market or a customs union, nor seek wider political integration.
The process of negotiating membership is largely about proving to existing members that Britain can meet the group's standards on tariff removal and trade liberalisation, and then setting out details of how and when it will do so.
"The CPTPP agreement has strong rules against unfair trade practices like favouring state-owned enterprises, protectionism, discriminating against foreign investors, and forcing companies to hand over private information," Britain's trade department said.
"The UK's joining will strengthen the international consensus against such unfair practices."
The UK government was yesterday expected to publish documents setting out its assessment of the benefits of membership, but highlighted cars and whisky as goods exports that would benefit.
The US withdrew from an earlier planned trans-Pacific trade pact under then President Donald Trump.
His successor Joe Biden spoke prior to his election last November about the possibility of renegotiating the deal, but has not laid out any firm plans since taking office.
REUTERS
