UK inks biggest trade deal after Brexit

LONDON

The UK will join 11 other countries in a major Asia-Pacific trade partnership, Prime Minister Rishi Sunak announced on March 31, in the country’s biggest post-Brexit trade deal following nearly two years of talks

Britain will be the first new member since the creation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018, and the first European country in the bloc.

The trade grouping will include more than 500 million people and account for 15 percent of global GDP once the UK becomes its 12th member, according to Sunak’s office.

It said Britain’s admission -- after 21 months of “intense negotiations” -- puts the country “at the heart of a dynamic group of economies” and was evidence of “seizing the opportunities of our new post-Brexit trade freedoms”.

The development fulfils a key pledge of Brexit supporters that, outside the European Union, the UK could capitalise on joining other trade blocs with faster-growing economies than those closer to home.

Critics have argued that such ventures will struggle to compensate for the economic damage sustained by leaving the EU, the world’s largest trading bloc and collective economy.

“We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms,” Sunak said in a statement announcing the deal.

“As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation.”

The CPTPP is the successor to a previous trans-Pacific trade pact that the United States withdrew from under former President Donald Trump in 2017.

Its members include fellow G7 members Canada and Japan, and historic UK allies Australia and New Zealand.

The remaining members are Mexico, Chile and Peru, along with Malaysia, Singapore, Vietnam and Brunei.

In Tokyo, Japanese government spokesman Hirokazu Matsuno welcomed the announcement.

“The UK is a global strategic partner and also an important trading and investment partner,” he told reporters.

Its accession “will have great meaning for forming a free and fair economic order,” he added.

Despite rising geopolitical tensions, in particular with Canberra, China formally applied to join the bloc in 2021.

All existing members must reach a consensus for a new country to enter the CPTPP.

Matsuno said Japan would need to examine whether China and other nations hoping to join can meet the required conditions, and would also consider the “strategic viewpoint” and Japanese public opinion.

Since Britain quit the EU’s single market in 2021, it has been trying to strike bilateral deals to boost its international trade -- and flagging economy.

London has so far inked agreements with far-flung allies including Australia, New Zealand and Singapore, and is in talks with India and Canada.

However, a prized pact with the United States remains stalled.

The UK applied to join the CPTPP in February 2021, kicking off talks later that year in June.

London and the other existing members are poised to take the “final legal and administrative steps required” before Britain will formally sign later this year, Sunak’s Downing Street office said.

It will boost the UK economy by £1.8 billion ($2.2 billion) over the long term, it added, citing estimates.

More than 99 percent of UK goods exported to member countries will now be eligible for zero tariffs, including key British exports such as cars, chocolate, machinery and whisky, it added.

British exports to them were already worth £60.5 billion in the year to the end of September 2022, and are expected to grow once inside the CPTPP, according to Downing Street.

The UK’s dominant services industry will also benefit from “reduced red tape and greater access to growing Pacific markets with an appetite for high-quality UK products and services,” it said.

Meanwhile, The British economy performed slightly better than previously estimated in the final quarter of last year as it expanded by 0.1 percent, revised official data showed on March 31.

The Office for National Statistics (ONS) initially said growth had been flat in the October-December period.

Either way, the UK narrowly avoided falling into recession at the end of 2022.