‘A significant milestone for UK trade’: Britain signs deal to join £12trn Indo-Pacific trading block | Politics News
Kemi Badenoch has signed off UK membership to a major Indo-Pacific trade bloc.
The business and trade secretary signed the accession protocol to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in New Zealand on Sunday.
The move brings British businesses a step closer to being able to sell to a market of half a billion people.
Britain is the first new member to join the bloc – comprising Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – since its formation in 2018.
The UK is also the first European nation to gain entry.
It represents Britain’s biggest trade deal since Brexit, cutting tariffs for UK exporters to a group of nations which – with UK accession – will have a combined gross domestic product (GDP) of £12trn, accounting for 15% of global GDP, according to officials.
The signing is the formal confirmation of the agreement which was reached in March after two years of negotiations.
Britain and the other 11 CPTPP members now begin work to ratify the deal, which in the UK will involve parliamentary scrutiny and legislation.
Officials believe it will come into force in the second half of 2024, at which point the UK becomes a voting member of the bloc and businesses can benefit from it.
Before putting pen to paper in Auckland alongside ministers from CPTPP nations, Ms Badenoch said: “I’m delighted to be here in New Zealand to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.
“We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.”
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To coincide with the signing, the government released figures showing that CPTPP-headquartered businesses employed one in every 100 UK workers in 2019, amounting to more than 400,000 jobs across the country.
While Britain already has trade agreements with the CPTPP members apart from Malaysia and Brunei, officials said it will deepen existing arrangements, with 99% of current UK goods exports to the bloc eligible for zero tariffs.
Dairy producers will gain export opportunities to Canada, Chile, Japan and Mexico, while beef, pork and poultry producers will get better access to Mexico’s market, according to officials.
But critics say the impact will be limited, with official estimates suggesting it will add just £1.8bn a year to the economy after 10 years, representing less than 1% of UK GDP.
Shadow foreign secretary David Lammy last month said the Tories were being “dishonest” by claiming CPTPP membership would make up for lost trade in Europe.
Officials herald the CPTPP as an alternative to the beleaguered World Trade Organisation in an increasingly fragmented international trading system.
HSBC chief executive Ian Stuart said: “The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation and technology.”
Some of the everyday items from CPTPP nations that will become cheaper for UK consumers thanks to the deal include Australian Ugg boots, kiwi fruits from New Zealand, blueberries from Chile and Canadian maple syrup, according to the Institute of Export and International Trade.
After the UK’s accession, attention may shift to other potential new members, with applications by China and Taiwan likely to cause tensions.
Kemi Badenoch will be appearing on the Sophy Ridge on Sunday programme on Sky News from 8.30am this morning.