The UK officially yesterday became the 12th member of a trans-Pacific trade pact which includes Japan, Australia and Canada, as it seeks to deepen ties in the region and build its global trade links after leaving the EU.
The UK last year announced it would join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in its biggest trade deal since Brexit.
The accession means the UK would be able to apply CPTPP trade rules and lower tariffs with eight of the 11 existing members from yesterday — Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam.
Photo: REUTERS
The agreement enters into force with Australia on Tuesday next week, and would apply with the final two members — Canada and Mexico — 60 days after they ratify it.
The pact represents the UK’s first free-trade deals with Malaysia and Brunei, but while it had agreements with the other countries, CPTPP provisions go further, especially in giving companies choices on how to use “rules of origin” provisions.
The CPTPP does not have a single market for goods or services, and so regulatory harmonization is not required, unlike the EU, whose bloc the UK left at the end of 2020.
The UK estimates the pact might be worth ￡2 billion (US$2.5 billion) a year in the long run — less than 0.1 percent of GDP.
However, in a sign of the strategic, rather than purely economic, implications of the pact, the UK could now influence whether applicants China and Taiwan would be able to join the group.
The free-trade agreement has its roots in the US-backed Trans-Pacific Partnership, developed in part to counter China’s growing economic dominance.
The US pulled out in 2017 under then-president Donald Trump and the pact was reborn as the CPTPP.
Costa Rica is the next applicant country to go through the process of joining, while Indonesia also aims to do so.
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