After 21 months of tough negotiations, the United Kingdom signed, on Friday March 31, the most important trade agreement since Brexit. London will join the CPTPP Trans-Pacific Free Trade Partnership.
In a Press release, British Prime Minister Rishi Sunak insisted that the United Kingdom could not have incorporated this partnership if it had still been a member of the European Union. Downing Street boasts how the country is “seizing the opportunities” of its “new post-Brexit trade freedoms”, while the benefits of Brexit are still pending, according to many observers.
A trading bloc representing 15% of global GDP
The United Kingdom is the twelfth state to join this trans-Pacific free trade alliance, which includes Australia, Japan, Canada, Mexico, Chile and New Zealand. The United States was also part of it until 2017, before Donald Trump ended their participation. The UK is the first country in Europe to join the CPTPP. With him, the alliance brings together around 500 million inhabitants and represents nearly 15% of the world’s GDP.
Eventually, the contribution to the British economy will reach 1.8 billion pounds sterling, according to estimates from London. By joining the CPTPP, the United Kingdom places itself “at the center of a group of dynamic and growing Pacific economies”, welcomed Rishi Sunak. “UK businesses will now have unrivaled access to markets stretching from Europe to the South Pacific,” he added.
According to Downing Street, more than 99% of British goods exports to CPTPP countries will be duty free, including key products such as cheeses, cars, chocolate, machinery, gin and whiskey . The service sector will also benefit from reduced red tape.
A group of dynamic economies
UK Trade Minister Kemi Badenoch meanwhile highlighted the benefits in terms of jobs for UK businesses and a wider gateway to access the Indo-Pacific region, from where ” the majority of global growth”.
Japan, also a member of the partnership, welcomed the news. Japanese government spokesman Hirokazu Matsuno on Friday called Britain a “global strategic partner” and an “important trade and investment partner”. Its accession “will be of great importance for the formation of a free and fair economic order”, he added.
The UK and CPTPP member countries must now finalize the final legal and administrative steps before formal signing this year. A victory for London which, since its effective exit from the EU and the European single market on January 1, 2021, has been seeking to establish all-out trade agreements to boost its international trade.