Britain is to begin the process of joining a Pacific trading bloc in what would be a significant post-Brexit boost after trade with the European Union dropped.
The UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would create a trading area almost the size of the EU, the Japanese economic minister said.
On Wednesday night the 11-member CPTPP agreed that Britain could begin formal talks with a view to joining the bloc, which removes tariffs on 95 per cent of goods. The union comprises Japan, this year’s chair, Canada, Australia, Mexico, Singapore, New Zealand, Malaysia, Chile, Vietnam, Peru and Brunei. These countries are home to about 500 million people and accounted for £110 billion worth of trade with the UK in 2019, according to a government estimate.
Liz Truss, the international trade secretary, said that membership of the CPTPP represented “a huge opportunity for Britain”. She said: “It will help shift our economic centre of gravity away from Europe towards faster-growing parts of the world, and deepen our access to massive consumer markets in the Asia Pacific. We would get all the benefits of joining a high standards free trade area, but without having to cede control of our borders, money or laws.”
The trade department said that the UK’s accession to the CPTPP “could cut tariffs in vital UK industries like food and drink and the automotive sector as well as creating new opportunities in areas like digital, data, and across services”. It said: “The UK will continue to work closely with Japan . . . alongside the other CPTPP nations to progress negotiations as quickly as possible.”
Barack Obama brought the United States close to joining the CPTPP but Donald Trump pulled out of talks shortly after taking office in 2017 and President Biden has made no move to restart negotiations.
One of the initial aims of the partnership was to counter China’s rapid growth but with the US out, Beijing has shown an interest in joining it. For this reason, Labour warned in April that the CPTPP could ultimately amount to a trade deal with China by the back door.
Britain asked to join the CPTPP in February. Negotiations are due to start in the “coming weeks”.
Yasutoshi Nishimura, Japan’s economic minister, said: “There’s a big meaning to this from a strategic viewpoint of strengthening economic relations between Japan and the United Kingdom.” He said that the UK’s admission to the CPTPP would bring the nominal GDP of the bloc close to that of the EU.
Comparing the first quarter of this year with the final quarter of 2020, exports to the EU fell by 18.1 per cent and imports from the EU by 21.7 per cent, Office for National Statistics figures showed.
Dan Tehan, Australia’s trade minister, said: “The economic and strategic heft of the CPTPP will be strengthened through the accession of high quality, high ambition economies.”
The UK and Japan signed a trade agreement in October last year and the UK and Australia have agreed in principle to sign one.
The CPTPP member nations said that negotiations with the UK would show their “commitment to support a free, fair, open, effective, inclusive and rules-based trading system”.