UK hopes to boost international trade by joining Trans-Pacific Free Trade Partnership
After twenty-one months of negotiations, London has landed its biggest trade deal since Brexit. The United Kingdom announced on Friday March 31 that it was joining the Trans-Pacific Free Trade Partnership.
It thus becomes the first country in Europe to join the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) which will include twelve countries, for a cumulative GDP of 11,000 billion pounds sterling (12,500 billion euros), underlines Downing Street in a statement. The bloc brings together 500 million inhabitants and 15% of the world’s GDP, including the United Kingdom. London and the CPTPP member countries must now finalize the final legal and administrative steps before the agreement is formally signed this year.
Highlighting the fact that the United Kingdom could not have joined this partnership if it had still been a member of the European Union (EU), Downing Street praised the way in which the country “seizes opportunities” of its “new post-Brexit commercial freedoms”while the benefits of exiting the bloc are still pending.
Exemptions from customs duties
More than 99% of British goods exports to CPTPP countries are exempt from customs duties, notes Downing Street, which cites flagship products such as cheeses, cars, chocolate, machinery, or even gin and whiskey. The service sector will also benefit from reduced red tape. Eventually, the contribution to the British economy would reach 1.8 billion pounds sterling (2.04 billion euros), according to estimates cited by London.
“This agreement demonstrates the real economic benefits of our post-Brexit freedoms”said British Prime Minister Rishi Sunak. By joining the CPTPP, the United Kingdom places itself “at the center of a group of dynamic and growing Pacific economies”he greeted, quoted in the press release. “UK businesses will now benefit from unrivaled access to markets from Europe to the South Pacific”he added.
Trade Minister Kemi Badenoch highlighted the benefits in terms of jobs for British businesses, and access to a wider gateway to the Indo-Pacific region, from which is expected “the majority of global growth”.
The agreement between London and Washington is stalling
Since its effective exit from the EU and the European single market on 1er January 2021, the United Kingdom is seeking to forge all-out trade agreements to boost its international trade. London has notably concluded commercial treaties with the EU and other European states, but also with more distant countries such as Australia, New Zealand or Singapore. Discussions are underway with India or Canada. On the other hand, the agreement so longed for by the British with the United States is long overdue and negotiations with Washington are stalling.
Signed notably by New Zealand, Australia, Canada and Japan, the CPTPP is the most important free trade pact in the region. Former US President Donald Trump announced on January 23, 2017 the withdrawal of his country from this agreement, to which his country was initially bound, even before its entry into force – which has been taking place in stages since December 2018.
The United Kingdom had applied to join the CPTPP in February 2021. Negotiations had started in June of the same year. In November 2022, Rishi Sunak said his country should ” take time “ to negotiate good trade agreements with its partners in the wake of Brexit, contrasting with the desire of its predecessors to quickly conclude such agreements.