Britain applies to join a massive 11-nation free-trade bloc of Asia-Pacific countries, a year after leaving EU
The United Kingdom (U.K.) has officially announced to apply for Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Monday, February 1, 2021.
U.K.’s application to join the free trade area with 11 Asia and Pacific nations comes a year after it officially left the European Union (EU.).
Also know as TPP11, the CPTPP refers to a trade agreement between 11 nations of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It evolved from the Trans-Pacific Partnership (TPP), which never entered into force due to the withdrawal of the United States (U.S.) At the time of its signing, the 11 countries’ combined economies represented 13.4% of the global Gross Domestic Product (GDP). It is the 3rd largest free-trade area in the world by GDP after the U.S.–Mexico–Canada Agreement, the and the European Single Market.
Speaking on the application, the Prime Minister of U.K. – Boris Johnson said, “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.”
Speaking to media, the Secretary of State for International Trade – Liz Truss said, “In future it’s going to be Asia-Pacific countries in particular where the big markets are, where growing middle-class markets are, for British products.”
He further added, “Of course British businesses will have to reach out and take these opportunities, but what I’m doing is I’m creating the opportunities, the low tariffs, removing those barriers so they can go out and do that.”
The official twitter handle of Department of International Trade of U.K. tweeted,
Tomorrow the UK will take the first formal step toward joining the #CPTPP group.
— Department for International Trade (@tradegovuk) January 31, 2021
This will mean:
📈 lower tariffs on UK exports
👩🏭 increased investment, supporting jobs across UK
🌏 new opportunities in the industries of the future
Read more: https://t.co/AkiLDPIe7L pic.twitter.com/TaWJIu4mFI
However, the immediate impact is likely to be modest as the U.K. already has free trade deals in place with several CPTPP members, some of which were rolled over from its EU membership. The U.K. is negotiating deals with Australia and New Zealand. In total, CPTPP nations accounted for 8.4% of U.K. exports in 2019, roughly the same proportion as Germany alone.
The free trade block aims to reduce trade tariffs – a form of border tax – between member countries. It includes a promise to eliminate or reduce 95% of import charges, although some of these charges are kept to protect some home-made products, for example Japan’s rice and Canada’s dairy industry. In return, countries must cooperate on regulations, such as food standards. However, these standards and regulations do not have to be identical and member countries can strike their own trade deals.
The U.K. is the first non-founding country to apply to join the CPTPP and, if successful, would be its second biggest economy after Japan.
