- The UK had applied to join the CPTPP in January after its exit from the European Union earlier this year.
- The CPTPP is the largest trading bloc and accounts for 13 per cent of the world’s GDP.
- The UK wants to gain tariff free trading access to the bloc’s member economies.
The UK is set to begin formal negotiations to join the free trade area group, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in order to gain tariff free trading access to the bloc’s member economies.
The UK’s International Trade Secretary Liz Truss said that being granted member status by the bloc would be a post Brexit prize that the nation had been interested in seizing.
Truss also added that membership within the trading bloc would be a great opportunity for the UK and would help British innovators, manufacturers and farmers export to some of the biggest economies in the world.
The UK had applied to join the CPTPP in January after its exit from the European Union earlier this year. The UK is keen to lower tariffs on key exports such as cars, whiskey, beef and lamb. It also plans to increase its services exports in the Asia-pacific region.
According to the government, the UK estimates its free trade group to be worth up to £9 trillion.
What is the CPTPP?
The CPTPP is a trans pacific free trading bloc comprising of 11 nations, covering a total population of about 500 million people and accounting for 13 per cent of global GDP. The member nations include Australia, New Zealand, Brunei, Japan, Canada, Malaysia, Mexico, Peru, Vietnam, Singapore and Chile.
The free trade area come into place in 2018 with the UK being the first non-founding nation expressing its interest to join the bloc. According to the Department for International Trade, UK’s exports to the bloc’s member countries is expected to rise by 65 per cent or around £37 billion, between now and 2030.
If the UK gains membership in the bloc, it will be the second largest economy after Japan.
How does the UK benefit
The UK will benefit with up to 0.1 per cent of improvement in the UK’s economy upon gaining membership. It will also gain from either a tariff free or a 95 per cent reduction of import charges or tariffs upon membership.
However, this is more of a strategic membership from the UK’s point of view since it stands to benefit if the US joins the bloc. The UK’s trading size with the US is double the value of the CPTPP’s members combined. However, the US president Joe Biden has so far not expressed any interest to join the CPTPP.
Also Read: Is New Zealand-UK trade deal in the offing?
Also, there have been some concerns from various groups in the UK against the recent bilateral free trade agreement with Australia, with British farmers raising concerns that they may face price undercutting and lower welfare standards from Australian import.