The UK has joined a trans-Pacific trade pact to strengthen ties in the region and build its global trade links after leaving the European Union in 2020. Its entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) marks the country’s biggest trade deal since Brexit.
UK exports to the 11 other countries in the CPTPP – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam – were worth £60.5 billion ($75 billion) in the 12 months to the end of September 2022. The agreement will cut tariffs on food, drink and cars, and will boost the UK economy by £1.8 billion ($2.25 billion) each year in the long term, the government says.
Regulatory harmonisation will not be required, as the countries in the CPTPP do not have a single market for goods or services, unlike the EU. Nevertheless, the deal has drawn some criticism over concerns that the UK will come under pressure to reduce standards on food and the environment to compete with CPTPP countries. The UK is liberalising tariffs on palm oil from Malaysia, even though the product has been blamed for widespread deforestation. However, it has not agreed to remove a ban on hormone-treated beef.
The deal may not offset the impact of leaving the EU, with the UK’s Office for Budget Responsibility estimating the post-Brexit trading relationship between the UK and EU will reduce long-run productivity by 4% relative to remaining in the EU.
Britain’s goods exports have recently fallen behind those of all other G7 economies, with trade experts saying this is more evidence of the impact of Brexit, according to The Financial Times. UK exports in October-December 2022 – excluding precious metals – were more than 9% lower than their 2019 average.
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International Trade Magazine
Editor, International Trade Magazine
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