On July 16, the UK signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), two years after first formally applying to join the Indo-Pacific trade bloc. The UK will be the first non-original member and European country to join the agreement since its ratification in 2018.
Following its withdrawal from the EU in January 2020, the UK began negotiations on several free trade agreements (FTAs) to remove or reduce tariff and non-tariff barriers to trade, in an effort both to establish new agreements and to replace previous EU trade agreements.
Its failure to secure a UK-US FTA saw UK interest in joining several multilateral FTAs, including the CPTPP. As the World Trade Organization only permits regional multilateral trade agreements (all original members are located on either side of the Pacific Ocean), the UK had to rely on its sovereignty over the Pitcairn Islands, located in the southern Pacific, to qualify to join the CPTPP.
The European nation that now also claims Asia-Pacific identity had good reason to pursue joining the trading bloc. The 11 founding members — which include some of the world’s fastest growing economies — account for 14% of global GDP, and total UK exports to CPTPP countries were already worth GBP60.5 billion between September 2021 and September 2022. Both sets of numbers will grow when the UK’s accession to the CPTPP is ratified by its government.
In the long run, the UK estimates that joining the CPTPP will boost the UK economy by GBP1.8 billion, with wages also forecast to rise by GBP800 million compared to 2019 levels.
As it stands, aside from the UK, the main beneficiary of this provisional update to the CPTPP’s membership is Malaysia, which now has its first FTA with the UK and will gain tariff-free palm oil exports into the UK, from current tariffs of up to 12% now.
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In March, when the UK first announced that substantial negotiations had concluded, Prime Minister Rishi Sunak said this of the trade deal: “We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms. As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation.”
This “flexing” of new-found trading breadth hardly came as a surprise to Institute of Management Development Professor David Bach, who says that the UK has been in “a bit of a bind” post-Brexit.
“There are certainly examples of newly independent states back in the 1960s around decolonisation that were trying to forge partnerships with countries as their way of announcing their independence,” he says. “To some extent, that’s what we’re seeing right now with post-Brexit Britain.”
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Bach notes that part of the Brexit pitch surrounded a “Global Britain” that was “unconstrained” by the EU and could forge a different path. “Interestingly, at least among British business elites, Singapore was seen as a reference point, as an advanced, sophisticated, globally-connected, pragmatic, business-friendly location,” he adds.
While the political economy expert acknowledges cultural and economic ties with Commonwealth members of the CPTPP, he believes that the UK government has also faced the imperative of demonstrating an “upside” to Brexit — and for British business in particular.
“After seven years, the narrative has primarily revolved around what a disaster Brexit has been for British business and the British economy,” says Bach. “I think the verdict on whether Global Britain can happen is still very much out.”
