February 1, 2021
UK Applying to Join Asia-Pacific Free Trade Pact
The UK will apply to join a free trade area with 11 Asia and Pacific nations today in an effort to boost UK exports — a year after it officially left the EU.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership – or CPTPP – covers a market of around 500 million people. Members include Australia, Canada, Japan, New Zealand, Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam.
Joining the bloc would reduce tariffs on UK exports such as whisky and cars, as well as service industries. However the immediate impact is likely to be modest, as the UK already has free trade deals in place with several CPTPP members, some of which were rolled over from its EU membership.
The UK already has trade deals with seven of the 11 nations – and is pursuing two more. In total, CPTPP nations account for less than 10% of UK exports, a fraction of what goes to the EU. This deal would however deepen some of those ties – and allow UK manufacturers who source components from multiple nations in the bloc some benefits under “rules of origins” allowances.
But the real boost could come in the future, if others join – in particular the US, as President Biden has hinted. That would give the UK that hoped-for trade deal with America – within a trading bloc wielding considerable power on the global stage.
(Source: BBC News)