LONDON– The UK has agreed to join an Asia-Pacific trade deal that includes Japan, Mexico and Australia – the biggest new trade deal Britain has struck since leaving the European Union three years ago.
The UK government said on Friday it had reached an agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after nearly two years of negotiations.
The government said membership would cut tariffs on British dairy and other goods and eliminate red tape on services, which would boost the UK economy by £1.8 billion ($2.2 billion) “in the long run”.
Prime Minister Rishi Sunak said the deal “shows the real economic benefits of our post-Brexit freedoms”.
“Joining the CPTPP trading bloc places the UK as the first new nation and first European country at the heart of a dynamic and growing group of Pacific economies,” Sunak said.
The deal comes as the UK seeks an “Indo-Pacific alignment” in its economic and foreign policies in response to the region’s economic growth and China’s increasing influence on the world stage.
Critics said the deal with nations thousands of miles away was insignificant compared to Britain’s trade with its neighbors in the 27-nation EU. Brexit has imposed trade barriers between the UK and the bloc, which remains by far the UK’s largest economic partner. The government’s budget office said in November that Brexit had had “a significant adverse impact on UK trade”.
David Henig, a trade expert at the European Center for International Political Economy, said CPTPP membership would not have major economic implications but “the bottom line” is good for Britain.
“Doesn’t do us much (e.g. services are weak) but trade policy these days is all about marginal gains and it should be,” he wrote on Twitter.
Members of the CPTPP are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The United States, the world’s largest economy, is not part of the CPTTP; Former President Donald Trump withdrew the country from its predecessor, the Trans-Pacific Partnership. His successor Joe Biden is not back.
China, which has the world’s second largest economy, has applied to join, a move that would quadruple the group’s total population to about 2 billion people.
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