Britain seizes ‘post-Brexit freedoms’ but immediate benefits appear limited
The Government struck a deal to join an 11-member Asia-Pacific trade bloc last week, a step hailed by No. 10 as an example of Britain seizing its “post-Brexit freedoms”.
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The deal, secured following two years of talks, will make the UK the first nation to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since its launch in 2018.
Downing Street said that under its terms, 99% of UK goods exported to the bloc’s member states – Australia, Canada, Japan, Mexico, New Zealand, Singapore, Brunei, Chile, Malaysia, Peru and Vietnam – would be eligible for zero tariffs.
Trade Secretary Kemi Badenoch described the deal as the most significant commercial agreement signed by the UK since Brexit, and a “gateway to the wider Indo-Pacific region”. Labour welcomed the agreement, but noted that the Government’s own analysis suggested that it will only increase UK GDP by 0.08% in a decade.
What did the papers say?
This deal is “exactly what Brexit was meant to be about”, said the Daily Mail – a major shift away from the low-growth eurozone towards some of the world’s most dynamic economies.
Between them, the CPTPP nations currently generate 13% of global GDP and have a population of half a billion. By 2030, the Indo-Pacific region will be home to half the world’s middle-class consumers – “2.3 billion potential customers”.
British businesses will now have privileged access to this rapidly-growing market, said The Daily Telegraph, so we should take forecasts that the deal will have only a negligible impact on long-term economic growth with a generous “pinch of salt”.
Maybe so, but the immediate economic benefits of the deal are likely to be limited, said The Times. Exports to CPTPP nations were worth about £60bn in 2021-22 (compared with exports of £161bn to the US and £330bn to the EU), and Britain already has free trade agreements with all but two of the group’s members.
That said, the deal gives Britain more influence in a crucial region, and should cut costs and red tape for businesses.
“Rishi Sunak is on a roll,” said Ambrose Evans-Pritchard in The Daily Telegraph. Fresh from putting UK-EU trade relations on a workable foundation by signing off on the Windsor Framework, the PM has now secured a deal that could be even more transformative.
Once it includes the UK, the CPTPP will account for more than 15% of global GDP – a bigger share than the EU. And if more states from Latin America and east Asia join (and many want to), it could become “the world’s largest trading system”.
In short, Britain is now part of a group of economies that are set to dominate the coming decades. But this deal is about more than tariffs and imports, said Cristina Gallardo in Politico. “It’s about post-Brexit Britain’s place in a 21st century dominated by the rise of China.”
It puts meat on the bones of the UK’s Indo-Pacific foreign policy tilt; and, crucially, it gives the UK a veto over other countries’ applications to join the group – meaning it could step in to thwart China’s efforts to do so. But at what cost, asked Nick Dearden in The Guardian.
Britain made big concessions to secure this deal. It was forced to “lower environmental standards”, including by cutting tariffs on exports of palm oil, plantations of which drive deforestation in Malaysia.
And the bloc’s focus on accepting imports, even when standards diverge, means that Britain will now face pressure to accept “hormone-treated beef” and food treated with pesticides that are banned here, thereby undermining British farmers.
Now we’ve “taken back control”, you’d hope MPs would be able to scrutinise such deals. But the parliamentary committee that examined treaties like the CPTPP was quietly abolished last month.
Frankly, it’s absurd to sell the deal as a Brexit bonus, said Paul Waugh in The i Paper. The 0.08% boost to GDP it’s forecast to give us pales in comparison to the 4% hit to GDP we’re taking as a result of Brexit; and with Britain facing stagnant wages and years of limp growth, it comes across as “tone-deaf” too. Time for “a dollop of honesty”.
What’s next?
The agreement reached by the Government paves the way for formal accession to the CPTPP next year, The Times reports.
Ministers hope the group will then continue to grow: Costa Rica, Uruguay and Ecuador are among the nations interested in joining. There are also hopes that the US could join.
It was due to be a founder member, but pulled out during the Trump administration. The dairy, car and spirits sectors were tipped as potential winners from the deal. Ministers also hope that the agreement could act as a spur for finalising a UK-India trade deal.
