Three years after exiting the EU, the UK joined a trade treaty with 11 Asia-Pacific nations.
According to the government, joining the group will increase UK exports by reducing tariffs on products such as cheese, cars, chocolate, machinery, gin, and whisky.
The government believes that joining the bloc will increase the British economy by 0.08 percent.
The trade zone encompasses a market of approximately 500 million individuals.
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was established in 2018.
Membership in the CPTPP reduces trade restrictions and tariffs, which are a form of a border tax, on goods.
After 21 months of negotiations, the UK became the first European member. The 11 members make for 13% of global income.
The government stated that this was the “biggest trade deal since Brexit” for the United Kingdom.
However, the anticipated benefits of membership in the United Kingdom are modest. Brunei and Malaysia, the United Kingdom already have free trade agreements with all of the members except Brunei and Malaysia. Some of which were carried over from its previous membership in the European Union.
The government forecasts that commerce will only grow the economy by 0.08% over the next decade. The government’s forecasting agency, the Office for Budget Responsibility (OBR), has previously estimated that Brexit would reduce the UK’s potential economic development by about 4% over the long term.
‘Prime position’
However, according to Prime Minister Rishi Sunak, the agreement demonstrates the “real economic benefits of our post-Brexit freedoms.”
“As a member of CPTPP, the United Kingdom is now in a prime position to seize opportunities for new jobs, growth, and innovation in the global economy,” he said.
British companies will now have unprecedented access to markets from Europe to the South Pacific.
The Business and Trade Secretary, Kemi Badenoch, compared the deal to “buying a start-up.
She told Radio 4’s Today program, “This is not intended to replace EU trade; rather, it is an addition. We are still in a free trade agreement with the EU.”
“You wouldn’t buy a small company and expect it to deliver immediately – we are looking at the potential,” she said, adding that “40% of the world’s middle class will come from that region” in seven years.
Ms. Badenoch denied any negative impact on UK agriculture, stating that the agreement will “create new markets” for producers.
Nick Thomas-Symonds, the shadow international trade secretary for Labour, described the United Kingdom’s entry into the CPTPP as “encouraging,” but he added that questions persist regarding “consumer safety, food safety, data protection, and environmental protections.”
Other “benefits” of joining the bloc, according to the government, include a boost to the services sector, as UK firms will not be required to establish a local office or be residents to provide a service, putting them on par with local firms.
The government and CPTPP members will complete legal and administrative steps for the UK to join in 2023.
