By Alistair Smout and Kaori Kaneko
LONDON/TOKYO, March 31 (Reuters) – Britain on Friday said it had struck a deal to join an 11-country trans-Pacific trade pact which includes Japan and Australia as it looks to deepen ties in the region and build its global trade links after leaving the European Union.
Prime Minister Rishi Sunak said Britain had agreed to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in a move his office said was the biggest trade deal since Brexit.
“Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies,” Sunak said in a statement, adding the deal demonstrated “the real economic benefits of our post-Brexit freedoms.”
Britain has been looking to build global trade ties following its departure from the EU in 2020 and has looked to pivot toward geographically distant but fast-growing economies.
It is deepening its ties in the Indo-Pacific as its foreign policy framework casts China as an “epoch defining challenge“.
Other members of CPTPP are Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Britain is the first new member to join the group.
Membership will supplement existing bilateral Free Trade Agreements (FTAs) Britain has with most of the member countries, and gives businesses extra options over the terms they can trade under.
The overall impact of the trade deal is set to be modest. Britain said the deal, which will cut tariffs on cars, spirits and dairy products, would boost the economy by 1.8 billion pounds ($2.2 billion) each year in the long-run – a figure that could rise as more countries join the pact.
“The Pacific Rim is forecast to grow twice as fast as Europe, so UK businesses should be thinking about their regional presence,” said Sally Jones, trade policy and strategy partner at EY.
“The CPTPP makes that much easier, and the CPTPP will only get bigger as more countries look to join.”
Britain has agreed new post-Brexit trade deals with Australia and New Zealand, and agreed an FTA with Japan in 2020. It is also in talks with Canada and Mexico over new FTAs, after it rolled over previous EU trade deals at the end of 2020.
FURTHER EXPANSION?
Japan’s economy minister Shigeyuki Goto said Britain’s joining the pact was “a great significance” in further promoting free trade, open and competitive markets as well as economic integration beyond the Pacific Rim.
($1 = 0.8079 pounds)
EXPLAINER-Why is Britain joining a trans-Pacific trade pact?
Britain agrees to join trans-Pacific trade pact
Britain launches free trade talks with Canada
Russia and China threaten to create global ‘danger and disorder’, Britain says
Britain launches free trade deal talks with Mexico
Britain expected to reach broad agreement on joining Pacific trade pact soon
Eurosceptics rubbish UK post-Brexit fix as ‘practically useless’
Rishi Sunak strikes post-Brexit Northern Ireland deal with EU
GRAPHIC-UK business investment has fallen since the Brexit vote
GRAPHIC-Growth prospects for major economies
(Reporting by Alistair Smout in London; Aditional reporting by Eimi Yamamitsu and Mayu Sakoda in Tokyo; Editing by Nick Zieminski and Sonali Paul)
((alistair.smout@thomsonreuters.com; +44 207 542 7064; Reuters Messaging: alistair.smout.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
