Britain will begin negotiations on Tuesday (June 22) to join a trans-Pacific trade deal. Britain will see this move as a key step in shifting its focus from Europe to the Pacific economies after leaving the European Union. The Pacific economies are geographically farther away from the U.K. but their economies are growing more rapidly.
The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) abolishes 95 percent of tariffs among its members. Current members include Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia.
The UK hopes to carve out its place in world trade as an exporter of high-end consumer goods and professional services. The UK is seeking or already has trade agreements with larger member countries, and joining this agreement would complement that.
“This is where the UK’s greatest international opportunities lie. We left the EU with a promise to deepen our ties with old allies and rapidly growing consumer markets outside Europe,” said Elizabeth Truss, Britain’s international trade minister. “This is the glittering post-Brexit prize I hope we seize.”
The Reuters report mentions that the CPTPP is not expected to lead to a surge in British exports, but will guarantee the U.K. market access in legal, financial and professional services, and that British officials see it as an important way for the U.K. to gain influence in the region. China is wielding increasingly dominant economic power in the region.
Unlike the European Union, the CPTPP does not impose uniform laws on member countries. The agreement does not seek to create a single market or customs union, and does not seek to expand political integration.
Elimination of Tariffs
The negotiation process for joining the agreement essentially involves demonstrating to existing member states that the UK can meet the group’s criteria for tariff elimination and trade liberalization, and then working out the details of how and when to do so.
“The CPTPP agreement has strong rules against unfair trade practices such as favoring state-owned enterprises, protectionism, discrimination against foreign investors and forcing companies to hand over private information,” the statement from the U.K. Department for International Trade said.
The statement added: “The UK’s accession will strengthen the international consensus against such unfair practices.”
The British government is expected to publish a document on Tuesday setting out the U.K.’s assessment of the benefits of joining the agreement, but will highlight the benefits for exports of goods such as cars and whiskey.
The U.S. was involved in developing the Trans-Pacific Partnership (TPP), the predecessor to the CPTPP, but the Trump administration withdrew from the TPP. biden talked about the possibility of renegotiating his membership before his election last November, but he has not outlined any substantial plans to return to the agreement since becoming president.