UK’s CPTPP membership expected to boost trade bloc's economic clout, open up new markets
The move to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership comes as the UK looks to build its global trade links, after leaving the European Union in 2020.
Britain’s inclusion in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will boost the profile of the trade bloc, and help member countries, including Singapore, trade more easily across borders.
Britain on Friday (Mar 31) said it had struck a deal to join the 11-country trade pact based around the Pacific Rim.
The move to join the CPTPP comes as the UK looks to deepen ties around the world and build its global trade links after leaving the European Union in 2020.
“We are looking forward to being part of a club that is shaping the rules of the road of trade, not just today but in the future. And I think that's a very optimistic place to be,” said Ms Natalie Black, the UK Trade Commissioner for Asia Pacific.
“There's a lot of challenges in the world, but we've come together to negotiate something quite special.”
The trade pact will allow Britain to work in a more progressive way, she told CNA’s Asia First. “It's a deal that spans across a whole range of issues, but also reflects our values around the environment and around workers' rights.”
OPENING UP MARKETS FOR BUSINESSES
The CPTPP is a free trade agreement (FTA) that was agreed in 2018 between 11 countries - Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Britain will become its 12th member, and the first to join the pact since its inception.
“We are the first new member of what we think is the most exciting deal in the world,” said Ms Black.
“Because we think that CPTPP reflects the way the world is changing. It's anchored in the Indo Pacific, which is going to be home to the majority of global growth.”
This is despite some critics feeling that the economic gains for Britain will be minimal, and do little to offset the European trade losses incurred as a result of Brexit.
The deal will open up more markets for British business, said Ms Black.
“We want to make it easier to trade in the way that the world is evolving,” she added.
“So particularly around the trading of services, making it easier for the digital elements of trade, and CPTPP is very progressive on this front. It's very forward-leaning, recognising that businesses want to operate in a different way now, and that's what we want to support.”
British High Commissioner to Singapore Kara Owen said the UK’s accession to the CPTPP is a huge endeavour.
“But also every country is negotiating to bring benefits to its companies and to its people. So it was really intense negotiations,” she added. “What really struck us throughout was the high level of political and technical will to get the job done.”
Entering the trade bloc “puts the UK at the centre of a dynamic and growing group of Pacific economies”, Prime Minister Rishi Sunak said in a statement, adding the deal demonstrated “the real economic benefits of our post-Brexit freedoms.”
CPTPP countries will have a combined gross domestic product (GDP) of £11 trillion (US$13.6 trillion) once Britain joins, up from £9 trillion. They will account for 15.4 per cent of the global GDP, up from 12.2 per cent.
On what the UK can bring to the group, Ms Black said: “We've got one of the strongest service economies in the world, and the importance of the service sector is only growing.
“That's why we see CPTPP as a real opportunity because of the digitisation of services, that's something that Asia is paying close attention to.”
British businesses also recognise the opportunity to build partnerships across the Indo Pacific, she added.
“They see the future consumers that they want to satisfy, but also the partnerships that they want to build with businesses across the region. And it really is a two-way partnership and a two-way opportunity.”
This is just the beginning, said Ms Black. “We've concluded negotiations, we look forward to formally signing the deal, but then of course we want to make the most of this opportunity. We're only getting going.”
BOOSTING INVESTMENT FLOW
Among the priorities are ensuring that British businesses and those throughout the region can reap the benefits of CPTPP to increase trade and investment, Ms Owen told CNA938.
On whether entering the trade pact will help boost the UK’s investments in Singapore, Ms Owen said the investment flow is already really strong in both directions.
“With CPTPP, I only expect that to grow. The UK has made a really concerted effort to invest more within the Indo Pacific,” she added.
“So the level of understanding and interest within our companies in the UK of what the opportunities are within Singapore, within the Southeast Asia region, and within the broader Indo Pacific is only growing.”
CPTPP membership will supplement existing bilateral FTAs Britain has with most of the member countries, and gives businesses extra options over the terms they can trade under.
“There are some countries, Malaysia for example, where this will be the first time that we'll be having tariff-free access to each other's economies,” said Ms Owen.
“So that will give a country like Malaysia access to our economy and it will give British companies access to Malaysia's economy. The benefits go across many sectors.”
Before signing the deal, lawyers will be going through the formal paperwork, said Ms Black.
“There's a parliamentary process that we will also need to kick off,” she added.
“So the negotiating teams have been locked away, working extremely hard, and now we enter the formal signing and then ratification process of a trade deal.”
Recognising the enthusiasm of other economies in joining the trade pact, Ms Black said: “The fact that there are so many economies interested in joining, which I think only supports our strategy and why we've worked so hard to join this deal. And it is tough to join.”
Trade negotiators have worked hard over the past two years to seal the deal, she added.
“We've worked across multiple time zones, multiple teams to make sure that we met the expectations of existing members. We've done that now and we're very proud of the strength of the UK economy and our ability to do that.”