One of the most significant outcomes of Brexit has been regaining the right to negotiate independent free trade agreements. Despite having no experience in this area for more than 40 years, the UK has made impressive progress, rolling over more than 60 EU agreements and negotiating new ones with Japan and Australia.
Last year the UK began formal negotiations to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Membership of this £9 trillion bloc presents an unrivalled opportunity to define not only our economic future, but our place in the world for decades to come.
The CPTPP is a mega-regional trade agreement. Consisting of 11 members, it represents just over 13% of global commerce, 15% of global trade, and has a population of 500 million people. If the UK were to join, CPTPP members’ total share of global GDP would be larger than even the EU.
CPTPP members include some of the world’s largest economies, such as Japan, and some of its fastest-growing economies, like Vietnam. In contrast to the EU, the CPTPP is primed for growth, with the group projected to be worth around a quarter of global GDP by 2050. The EU, meanwhile, will be just one tenth. By joining the CPTPP now we will be future-proofing our economy by ensuring we are a major player in an increasingly wealthy region.
And as they grow and get richer, there will be an increase in demand for British goods and services.
Indeed, we have already seen a huge growth in demand for British meat exports. The agreement will slash tariffs on 99% of British goods such as Scotch whisky and Land Rover cars, offer improved market access for services, and modern rules for digital innovators like Deliveroo. Analysis shows that in turbo-charging our trade with these economies every country and every region within the UK will benefit.
Unlike the EU, the CPTPP is a no strings attached agreement, which means we will get all of these benefits without having to surrender any of our sovereignty – we will maintain control of our money, our borders and our laws.
However, the benefits of CPTPP membership go beyond just trade. As we outline in our latest report, ‘Looking East’, cementing relationships in the Asia-Pacific region would be a geopolitically astute move for the UK.
The pandemic has highlighted the perils of over-relying on a limited number of supplies for imports, be it competition for PPE in the early stages of the pandemic, or more recently, the global rush for gas as economies rebounded. CPTPP can help alleviate such risks by diversifying both supply chains and export markets.
Nor is this about a ‘race to the bottom’, whatever some crtics might suggest. The UK is one of the most prominent champions of high standards in a whole host of areas, especially when it comes to workers’ rights and environmental standards. CPTPP membership will make it easier for us to embed these high standards in future global trade agreements, as well as ensuring that they are maintained in all member countries. Already we have seen how the prospect of CPTPP membership has led to improved labour laws and working conditions in developing countries such as Vietnam.
Perhaps most exciting is the role Britain could and should play in the future. The CPTPP has been designed to expand and the provisions in the agreement are seen by member states as a floor, rather than a ceiling. By joining, Britain has the chance to push for even more ambitious agreements in areas like telecommunications and critical minerals – going far beyond what the World Trade Organization or the EU have agreed to date.
And by having the UK as a member, CPTPP would go from a purely regional pact to one which is truly global in nature. We will have a seat at the table, helping to shape what will be one of the world’s largest and most dynamic, forward-looking trading agreements. The UK’s interest in joining has been quickly followed by interest from other countries, including South Korea and Ecuador.
CPTPP offers a golden opportunity for the UK to join a group of like-minded free trading nations, with a chance to influence the development of high-standard global rules and regulations. If our bid for membership is successful we will be sending a clear signal to the rest of the world that Global Britain is a rules based, outward-looking, free-trading nation.
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.