The United Kingdom on Sunday formally signed a treaty to join a major Indo/Pacific block, in what is described as the biggest trade deal since the country left the European Union, (Brexit) at the beginning of 2020.
Business Minister Kemi Badenoch put her signature on the accession protocol for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in Auckland, New Zealand.
This is a modern and ambitious agreement and our membership in this exciting, brilliant and forward-looking bloc is proof that the UK's doors are open for business, Badenoch said. She added that the pact meant that Britain has a seat at the table in the fastest-growing region and that other countries are queuing up to join the pact.
The broadcaster cited a government analysis that said the pact would boost UK exports by 1.7 billion pounds (€1.9 billion, US$ 2.23 billion), imports to the UK by 1.6 billion pounds and gross domestic product (GDP) by £1.8 billion pounds in the long term. The pact is expected to take effect in the second half of 2024.
The CPTPP is a landmark pact agreed upon in 2018 that cuts trade barriers among 11 countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The pact requires countries to eliminate or significantly reduce tariffs and make strong commitments to opening services and investment markets.
It also has rules addressing competition, intellectual property rights and protections for foreign companies. CPTPP is seen as a bulwark against China's dominance in the region, although Beijing has applied to join, along with Taiwan, Ukraine, Costa Rica, Uruguay and Ecuador.
Politicians in several countries, including the UK and Australia, are lobbying to keep China out, while Beijing is trying to prevent Taiwan from joining.
The UK government says CPTTP will cut tariffs for UK exports to Asia Pacific countries and with UK membership, the trading bloc will have a combined GDP of 12 trillion pounds and account for 15% of global trade. Britain is keen to deepen trade ties in the Pacific after Brexit in 2020.
London has been pushing a Global Britain strategy since it gave up EU membership after nearly 50 years, leaving the bloc's single market and customs union. Instead, former British Prime Minister Boris Johnson negotiated a trade deal called the EU–UK Trade and Cooperation Agreement.
Since Brexit, the UK has sought other trade deals with countries and trading blocks around the world that the government says have faster-growing economies than the EU.
But London will likely struggle to achieve free trade deals with large powers like China in the near term and even its closest ally, the United States has said further trade liberalization with Britain is currently off the table.
Critics say CPTTP and other deals will struggle to compensate for the economic damage sustained by leaving the now-27-member EU — the world's largest trading bloc and collective economy.
The UK's long-term productivity is forecast to be reduced by 4% as a result of Brexit, according to the government's spending watchdog, the Office for Budget Responsibility.
The UK already has trade deals with 10 of the 11 other CPTPP members and the eventual economic boost is likely to increase GDP by just 0.08% annually.
In 2022, Britain exported 340 billion pounds of goods and services to the EU, 42% of total UK exports.
Badenoch told Sky News half of global growth is forecast to come from the Indo-Pacific by around the middle of 2030 and growth will continue into the middle of the century.