Half a billion consumers. A combined GDP of £9 trillion. A naturally pro-free trade club. No wonder the UK wants to join the Comprehensive and Progressive Agreement for Trans Pacific Partnership, or CPTPP.
During our 45 years in the European Union, we often heard that the UK was happy with the idea of a free trade area, but had became increasingly opposed to the political union that the European Economic Community, then the European Community and finally the European Union was becoming.
However, there can be no doubt that the CPTPP is a classic free trade area. It spans four continents across Asia Pacific and the Americas, and includes some of the world’s most dynamic economies. It includes no moves to any political union – indeed, it would be hard to see, say Canada and Vietnam agreeing to pool sovereignty.
Right now, we’re on the final furlong to membership. Securing a deal that’s in the best interest of the UK and our businesses is one of my top priorities as Trade Minister.
This will be the biggest deal we’ve secured post-Brexit. And we will become the first country in the world to join the trade bloc’s existing 11 founding members, giving us a seat at a highly influential top table on the global stage.
The benefits to the UK of membership for our businesses are too many to list in full.
Joining CPTPP should mean 99 per cent of UK exports become eligible for tariff-free trade with trade bloc’s members. This could mean that we secure lower tariffs on iconic UK exports such as whisky and cars – both of which are in fierce demand in the Indo-Pacific.
These benefits will only grow over time. The more CPTPP expands, the greater the benefits and opportunities to the UK. With economies including the Philippines, Thailand, Taiwan, South Korea, Ecuador and Costa Rica having all expressed an interest in joining.
We will be at the heart of a dynamic group of countries, set to experience an extraordinary economic expansion, as the centre of gravity for global trade and growth shifts eastwards.
Indeed, 60 per cent of global trade already passes though shipping routes in the region. And the IMF expects the Indo-Pacific region to account for more than half of global growth over the next thirty years, compared to a quarter from the EU and North America combined.
Our accession will send a powerful signal that the UK is using our post-Brexit freedoms to futureproof the economy. We’re securing our place in the world in a network of countries committed to free and rules-based trade, one that rivals the single market as a global standards setter.
Under Donald Trump, the US withdrew from the bloc’s predecessor, the Trans-Pacific Partnership (TPP), but the United States joining CPTPP cannot be excluded for ever.
There is a window of opportunity for the UK to join this free trade family and help sets robust standards which level the playing field and fight against unfair and coercive trading practices.
Our place in CPTPP could also help us build on our individual relationships with fellow members. It interweaves nicely with the bilateral trade deals we’ve been negotiating – and we’ve already signed ambitious trade deals with Japan, Australia and New Zealand.
We’ve secured a bespoke Digital Economy Agreement with Singapore, capitalising on our two nations’ pioneering tech sectors.
And we’re currently underway negotiating modern trade deals with Mexico and Canada which will look to bring digital and services to the forefront.
As the world’s second-largest services exporter, CPTPP, which puts services front and centre, will play to Britain’s strengths. We’re looking forward to potentially making digital trade easier and smoother and driving more growth for our businesses.
I’m often asked what this deal will mean for agriculture. I’m convinced that CPTPP membership will benefit farmers too by opening export opportunities for our world-class produce. With CPTPP countries set to account for 25 per cent of global import demand for meat by the end of the decade, joining would support farmers to sell high-quality produce like beef and lamb into fast-growing markets like Korea and Vietnam.
Indeed, I often observed, during negotiations with Australia and New Zealand on agriculture, that our Commonwealth friends are more interested in selling their meat into Asia than to us. That is where the demand is growing, and the UK should be thinking about export opportunities for our farmers, too.
CPTPP membership will not mean reneging on our high environmental protections, animal welfare and food standards. It has similarly high standards when it comes to this area. We’ll ensure our market access agreements protect the livelihoods of farmers and the values of consumers across the UK.
It would be remiss of me not to mention the benefits that we will bring to the bloc. The positives of the UK joining the CPTPP are not just one-sided. Overnight, CPTPP will grow from 12 per cent of world GDP to 15 per cent – taking the trade bloc’s GDP to around £11 trillion.
There is much that we can offer the region – thanks to our expertise in many of the twenty-first century’s key industries from cleantech such as offshore wind and green infrastructure to digital and financial services.
And as a like-minded friend and ally to CPTPP countries, we will bring a new, strong, persuasive voice to the partnership – making the case for shared values, high standards and increased collaboration to drive jobs, growth and prosperity across the CPTPP family.
However the watchword with these talks is quality – not speed. We’re making good progress with our negotiations but we won’t settle for anything less than the best for UK businesses. I am determined that we will achieve exactly that.
Joining CPTPP will not mean we would have to neglect our important trade with Europe. It is unlikely the EU itself would ever join, given that a lot of CPTPP rules are currently incompatible with EU rules. But having tariff-free, quota-free access to the EU, as well as similar provisions with the 11 countries of CPTPP, would put the UK in a powerful position in the free trading world.
It would also leave Labour in a quandary. I have always believed that Labour could seek to join a customs union with the EU. I doubt they would seek to join the Single Market, given that would inevitably mean having to sign up to free movement of people. But it was official Labour policy before 2019 to seek a customs union with the EU – indeed, it was Sir Keir Starmer himself, as Shadow Brexit Secretary, who formulated such a policy.
Despite occasional protestations, I do not believe Labour has ever given up on this goal. Joining an EU customs union would invalidate most, if not all, of our independent trade policy. Labour might then seek to fold our UK-Australia and UK-New Zealand agreements into wider EU ones (although the EU has yet to finalise one with Australia).
But Labour would have to pledge to withdraw the UK from CPTPP, which would create a new trade disruption for this country and would certainly anger some of our closest allies around the world, like Canada, Japan and Australia.
Our status as an independent nation is putting the UK in an enviable position. In addition to tariff-free, quota-free trade with the EU and bilateral free trade agreements with 71 countries, we’re looking to secure almost as good access to 11 per cent of world GDP around the Pacific Rim.
There are, in short, huge economic and political reasons for joining CPTPP. I look forward to celebrating the day!
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