UK joins Asia-Pacific CPTPP trade bloc that includes Japan and Australia
After almost two years of negotiations, Britain has joined the 11-member Asia-Pacific trade bloc that also includes Japan and Australia.
The agreement secures access for British exporters to 500 million people in the 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership as part of an effort to reach global trade agreements after Brexit (CPTPP).
After 21 months of negotiations, an agreement was reached that will enable exporters to “seize opportunities for new jobs, growth, and innovation,” according to the government.
The UK parliament and those of the other 11 member states are anticipated to ratify the CPTPP, which spans Canada, Mexico, Japan, Australia, Vietnam, and Malaysia, later this year.
The agreement, which lowers tariffs on exports of goods like food, beverages, and automobiles, is expected to bring in an additional £1.8 billion over ten years, or about 0.08% of the UK’s annual GNP (GDP).
Unions criticized provisions in the agreement that would let big businesses sue the UK government in secret if they felt their profits had been hurt by changes to laws or regulations.
The deal allows multinational corporations to sue the UK government in secret courts for enacting laws that threaten their profits, such as raising the minimum wage or returning energy companies to public ownership, according to Paul Nowak, general secretary of the TUC.
In Vietnam and Brunei, “where independent unions are banned, and Malaysia, where migrant workers are subject to forced labor,” Nowak claimed that the agreement would sanction the exploitation of workers.
The UK is anticipated to set the standard for other applicants to join, such as Costa Rica and Uruguay, as the bloc’s first non-founding member.
Members, including the UK, are likely to push back strongly against China’s membership application because Beijing submitted it in 2021, several months after the UK. They will argue that Beijing should be prevented from joining unless it complies with current trade regulations.
The deal, according to the trade secretary Kemi Badenoch, shows off the “post-Brexit freedoms to reach out to new markets around the world and grow our economy.”
Some trade experts claimed that joining the CPTPP bloc would make it more difficult for the UK to re-join the EU in the future because doing so would make Brussels and London less amenable to one another’s trade agreements.
The UK’s ability to re-join the EU customs union is made more challenging by CPTPP membership, according to Sam Lowe, a trade expert at the advisory firm Flint Global. It also demonstrates that the regulatory philosophies of the EU and CPTPP are compatible because it appears that the UK will join without making significant changes to regulations that it inherited from the EU.
“We are at our core an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms,” the prime minister, Rishi Sunak, said.
The UK has bilateral agreements with a large number of the bloc’s members, including Australia, New Zealand, and Japan, which reduces the value of the general agreement.
Ministers do anticipate that as more countries gain access to the trade bloc, which will have an $11 trillion GDP, the deal will become more significant.
Protests akin to those that hindered trade negotiations between the EU and Washington in 2016 are anticipated in response to allowing secret courts to handle trade disputes between CPTPP members and the UK.
The European Parliament’s refusal to ratify any agreements containing the investor-state dispute settlement mechanism, which gives foreign investors the right to access an international tribunal to resolve disputes in secret, forced Brussels to end the TTIP trade negotiations.