UK signs off membership to major Indo-Pacific trade bloc

Kemi Badenoch has officially given her approval for the UK to join a significant trade bloc in the Indo-Pacific region. This decision brings British enterprises closer to accessing a market comprising of 500 million individuals, with reduced obstacles and trade barriers.

The Business and Trade Secretary put their name on the document to join the agreement for Trans-Pacific Partnership (CPTPP) in New Zealand on Sunday.

The United Kingdom is the inaugural addition and the initial European country to become part of the group – consisting of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam – since its establishment in 2018.

This trade agreement marks the largest deal for Britain since Brexit. It reduces taxes on goods for UK businesses that sell to a consortium of countries that, alongside the UK, hold a combined GDP of £12 trillion. This group of nations makes up 15% of the world's GDP, as confirmed by government officials.

The signing represents the official validation of the UK's inclusion, following two years of negotiations, in the membership agreement that was achieved in March.

Britain and the remaining 11 members of CPTPP will now embark on the process of validating the agreement, which in the UK will entail parliamentary examination and the enactment of laws to implement it.

Authorities predict that the implementation of this policy is likely to occur during the latter half of 2024. Consequently, the United Kingdom will acquire the status of a participating member in the organization, allowing its businesses to avail themselves of the advantageous opportunities it offers.

It's almost 1am in the United Kingdom and myself and my colleagues have just finished the formal discussions to become a part of the #CPTPP group! This is incredibly exciting for businesses and individuals in the UK as we boost our commerce with the vibrant Indo-Pacific area, which holds the key to future global economic expansion.

- Kemi Badenoch, a user with the handle @KemiBadenoch, posted a tweet on March 30, 2023.

Prior to signing the agreement alongside officials from CPTPP countries, Ms. Badenoch expressed her joy at being in New Zealand for the occasion. She emphasized that the deal would greatly benefit British businesses, leading to a significant increase in trade value worth billions of pounds. Moreover, it would provide access to a vast market of over 500 million individuals, creating immense opportunities that cannot be matched elsewhere.

"We are leveraging our position as a sovereign trading nation to become part of a dynamic, expanding, visionary trade alliance, which will contribute to the expansion of the British economy and enhance the numerous employment opportunities that CPTPP-affiliated enterprises already generate nationwide."

Although the majority of the particulars were finalized earlier in the year, the terms and regulations governing the UK's membership will be made public on Sunday.

This entails the promises and agreements that the United Kingdom is making to other countries regarding their access to markets.

Increased commerce, reduced duties, an expanding economy.

This is the outcome we can attain when we unlock the advantages of Brexit. pic.twitter.com/0PtcxuUA3Q

— Rishi Sunak (@RishiSunak) on the Imperial Commission Into AI Technologies (@ICAI_Tech) March 31, 2023

In conjunction with the agreement, the Administration disclosed data indicating that companies headquartered in CPTPP were responsible for employing approximately 400,000 individuals throughout the United Kingdom in 2019, constituting one percent of the total workforce.

It is anticipated that becoming a member of the trade organization will strengthen the partnership in terms of investment.

Although the United Kingdom already has trade pacts with members of the CPTPP, excluding Malaysia and Brunei, authorities have stated their intent to strengthen the current agreements. This will result in 99% of the UK's current merchandise exports to the bloc being eligible for tariff exemptions.

Officials have stated that dairy producers will have the chance to expand their exports to Canada, Chile, Japan, and Mexico. Similarly, beef, pork, and poultry producers will experience improved entry into the Mexican market.

However, detractors argue that the influence will be minimal, as the latest figures released by authorities indicate that it will only contribute a meager £1.8 billion annually to the economy over a decade, which is less than 1% of the United Kingdom's Gross Domestic Product (GDP).

The agreement signifies an extension of the post-Brexit strategy's shift towards the Indo-Pacific region, which is predicted to be the residence of approximately half of the global middle-class buyers by 2035.

As the upcoming general election approaches next year, and with the Labour party currently leading in the polls, it remains uncertain if the future government will prioritize the Indo-Pacific region as much as it aims to repair the strained relationship with the European Union after Brexit.

In the previous month, David Lammy, the individual responsible for foreign affairs within the opposition party, expressed his belief that the Conservative party was being deceitful by asserting that joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would compensate for the decline in trade with Europe.

Authorities celebrate the CPTPP as a substitute for the troubled World Trade Organisation in a progressively divided global trade environment.

Ian Stuart, the CEO of HSBC, stated that the official joining of the UK to the CPTPP is a notable achievement in terms of UK trade. This membership opens up opportunities for enthusiastic British companies to establish connections with vibrant emerging markets that hold great potential for start-ups, inventive ideas, and technological advancements.

According to the Institute of Export and International Trade, items like Ugg boots from Australia, kiwis from New Zealand, blueberries from Chile, and Canadian maple syrup will see reduced prices for consumers in the UK due to the CPTPP agreement.

According to Marco Forgione, the director general, the elimination of tariffs will enhance the accessibility of our top-notch British products - ranging from alcoholic beverages, sweets, automobiles, jewelry, and apparel - to the consumers residing in the Indo-Pacific region.

This agreement also provides an extra advantage in enhancing the interconnected networks of value and supply within the bloc.

Following the declaration of the UK's desire to become a part of CPTPP, numerous nations are presently considering joining as well. Consequently, the foreseeable future is likely to witness a significant surge in market accessibility and advantages for those involved.

Following the UK's entry, focus may divert towards additional potential candidates, leading to potential conflicts due to applications from China and Taiwan.

Environmental advocates and labor unions argued that the agreement would facilitate the trading of goods and services in a manner that harms nature and jeopardizes the safety of workers.

Angela Francis, the individual in charge of policy solutions at the conservation organization WWF-UK, expressed that the Government was actively facilitating the trading of items that are causing devastating harm to our precious natural environment.

According to Paul Nowak, the TUC's general secretary, the deal has the potential to prioritize the profits of multinational companies over important policies such as raising the minimum wage and nationalizing the energy sector.

"This trade agreement in the Pacific region is detrimental to both domestic and international workers. Once again, the ministers from the Conservative party have ignored appalling violations of human and labor rights in their eagerness to secure trade agreements," he stated.

However, the decision was positively received by the British Chambers of Commerce, who expressed that joining would be advantageous for businesses in the United Kingdom.

According to the BCC's trade policy leader, William Bain, the upcoming inclusion of the UK in this trade alliance brings the total number of countries to 12, representing 15% of the world's economic output.

"It will create fresh prospects for our businesses, fostering investments from both domestic and foreign sources, in conjunction with the remaining 11 nations starting from the latter part of the upcoming year."