UK to join Asia – Pacific free trade pact CPTPP
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|Prime Minister Boris Johnson (Photo: Reuters)|
The United Kingdom is applying to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), a trans-Pacific trading bloc of 11 countries, the government announced on Saturday.
"One year after our departure from the EU we are forging new partnerships that will bring enormous economic benefits for the people of Britain," Prime Minister Boris Johnson said in a statement.
"Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade," he added.
As reported by DW, by joining the Pacific free trade area, the UK stands to benefit from lower tariffs without deep political integration, as was the case with the European Union.
The UK will publish its negotiation objectives, scoping analysis, and consultation response in advance of negotiations expected to start this Spring.
CPTPP membership is a key part of the Government’s plan to position the UK at the centre of a network of modern free trade deals that support jobs and drive economic growth at home.
|British trade minister Liz Truss (Photo: BBC)|
The UK's trade with CPTPP members accounted for nearly 111 billion pounds (about $152 billion, €125 billion) in 2019, which is around six times less than the business the UK conducts with the EU.
London said joining the partnership would remove tariffs on 95% of goods traded between members, which include Japan, New Zealand and fast-growing economies like Mexico, Malaysia and Vietnam.
UK's International Trade Secretary Liz Truss will make the formal request when she speaks to officials in Japan and New Zealand on Monday. Negotiations are expected to begin later this year.
Launched in 2019, the CPTPP removes trade barriers among the 11 nations in the Asia-Pacific region. While the United States was one of the biggest proponents of the pact under former President Barack Obama, the Trump administration withdrew from the partnership before it was ratified in 2017.
Joining the £9 trillion partnership will cut tariffs for UK industries including food and drink, and cars, while also creating new opportunities for modern industries like tech and services, ultimately supporting and creating high-value jobs across the UK. Unlike EU membership, joining does not require the UK to cede control over our laws, borders, or money.
|(Photo: The Economics Times)|
UK trade with the group was worth £111 billion in 2019, growing by 8% a year since 2016. Benefits that CPTPP membership will bring for businesses include:
- Modern digital trade rules that allow data to flow freely between members, remove unnecessary barriers for businesses, and protect commercial source code and encryption.
- Eliminating tariffs quicker on UK exports including whisky (down from 165% to 0% in Malaysia) and cars (reducing to 0% in Canada by 2022, two years earlier than through the UK-Canada trade deal).
- Rules of Origin that allow content from any country within CPTPP to count as ‘originating’. For example, this would mean that cars made in the UK could use more Japanese-originating car parts, such as batteries.
- Easier travel for businesspeople between CPTPP countries, such as the potential for faster and cheaper visas.
Other high-profile figures comments on the event
International Trade Secretary Liz Truss
“Joining CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU and deepen our ties with some of the fastest-growing markets in the world”, International Trade Secretary Liz Truss commented. “It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home”.
“We’re at the front of the queue and look forward to starting formal negotiations in the coming months”, Truss emphasized.
|British trade minister Liz Truss is set to speak to officials in Japan and New Zealand on Monday to formally make the request (Photo: Reuters)|
Julian David, CEO of techUK
“Today marks an important step in the UK’s path to developing a modern trade policy that creates new opportunities for the UK tech sector. Building on our recent agreements with Japan and the European Union, the accession to the CPTPP will allow us to join a group of ambitious countries breaking the newest ground in digital trade.
“The UK has been a major beneficiary of the rise of digital trade with over 67% of service exports worth £190.3 billion being digitally delivered. CPTPP will open up new markets for innovative tech SMEs looking to grow and expand beyond our borders. We are looking forward to working with the government throughout the process.”
Mike Cherry, Federation of Small Businesses (FSB) Chair
“Membership of the CPTPP would be a hugely welcome development to all small businesses looking to either expand or begin their trading journeys. Crucially, at the very heart of this agreement is an SME chapter, something that we have lobbied for the inclusion of in every FTA, ensuring that no business is left behind".
“This is truly a world-leading agreement and one that will genuinely help small firms to thrive and succeed more than ever.”
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