UK Officially into the CPTPP.
The UK has been accepted into an Indo-Pacific trade bloc in what the government says is its biggest trade deal since Brexit.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between 11 countries across the Indo-Pacific, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
The partnership aims at reducing trade barriers and tariffs, with the hope of bolstering the economies of its members.
UK’s accession to the CPTPP was formally confirmed on Friday.
The UK is the first European country to enter the agreement, and the government claims it will lead to a £1.8bn boost to the economy “in the long run”.
While the UK already has trade agreements with most of the CPTPP members, apart from Malaysia, UK officials said it would deepen existing arrangements, with 99% of UK goods exported to the bloc now eligible for zero tariffs.
The deal has been praised by a number of business groups, including the Confederation of British Industry (CBI), Standard Chartered bank and the world’s second-largest wine and spirits seller Pernod Ricard.
But other trade experts have warned it will not make up for the economic hit caused by leaving the European Union.
Chancellor Jeremy Hunt said joining the CPTPP is a “massive opportunity” for British exporters and shows “our influence in this part of the world is becoming more significant”.
Ms Badenoch admitted the lower tariffs will apply to palm oil, which is responsible for destroying orangutan habitats, but said you “have to make trade-offs” when doing a deal and said the UK currently buys 1% of Malaysia’s exports and “moving to 2% from 1% is not what is going to cause deforestation.”
The UK began negotiations to join the bloc in September 2021 when Boris Johnson was in Downing Street.
The signatory countries of the CPTPP are home to 500 million people and the government claims the deal will be worth £11 trillion in GDP, accounting for 15% of global GDP.
However, critics said the impact will be limited, with official estimates suggesting it will add just £1.8bn a year to the UK economy after 10 years, representing less than 1% of UK GDP.
Interim general director Matthew Fell said: “Not only does the agreement provide greater access to a group of fast growth economies representing 14% of global GDP and over 500 million consumers, but membership reinforces the UK’s commitment to building partnerships in an increasingly fragmented world.
“CPTPP countries and business need to work together to future-proof the rules-based trading system and stimulate growth with a focus on digital, services and resilient supply chains.”
Labour leader Sir Keir Starmer welcomed the trade pact but warned the “yield is very small”, saying the net contribution to the UK economy “will be something in the order of 0.08%”.
“I do think it’s an important trade deal, but the yield is very small. Hopefully that will grow over time,” he said.
“But the rule in trade is that you’re more likely to trade with your nearer neighbours more and more often, so we do need that improved, that better trading relationship with the EU alongside any other trade deals that we sign.”
Source: Sky News