UK applies to join trans-Pacific trade group
Boris Johnson is to mark the first anniversary of Britain leaving the EU — the world’s largest trading bloc — by formally applying to join a trade group in the Pacific.
The British prime minister hopes US president Joe Biden will also join the group, opening a backdoor to closer UK-US trade ties as hopes of an early trade deal between London and Washington fade.
Critics claimed that a trade deal with 11 countries on the other side of the world would bring limited economic benefit to the UK, and saw no prospect of Mr Biden being in any rush to join the group.
But Mr Johnson said membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership would prove that “one year after our departure from the EU we are forging new partnerships”.
“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade,” he added.
The CPTPP includes fast-growing economies including Mexico, Malaysia and Vietnam along with established regional players such as Japan, Australia, New Zealand and Canada.
Liz Truss, UK trade secretary, will speak with ministers in Japan and New Zealand on Monday to request to join the CPTPP, with formal negotiations set to start this year.
Ms Truss believed membership of the partnership would boost trade that was worth £111bn last year and has been growing 8 per cent per year since the UK voted to leave the EU in 2016.
She calculated it will liberalise digital trade, eliminate tariffs more quickly on products such as whisky and cars and facilitate faster and simpler visa procedures for business people travelling to CPTPP countries.
Ms Truss argued membership will “complement” existing free trade agreements between the UK and countries including Japan, Canada, Mexico, Chile and Vietnam, which were “rolled over” from previous EU deals.
Speaking to the BBC, Ms Truss declined to say what effect CPTPP membership would have on the UK economy. She insisted the Pacific region was important as a centre of “future growth”.
British officials hope a bigger prize could be to use the CPTPP to build trade ties with the US, if the Biden administration chooses to join the group.
“We’re hopeful the US shares our ambition to join CPTPP, which would mean closer trading ties via plurilateral means,” said one British official.
But the new US president has vowed to improve his own country’s economy before signing new trade deals, and neither a UK-US agreement nor membership of the CPTPP are seen as high priorities.
“President Biden has repeatedly said that the CPTPP would need to be renegotiated,” said one US administration official. “The administration is currently focused on domestic investment and economic growth that supports the American middle class.”
Britain’s application to join CPTPP while ending free trade with the EU — with Brexit generating vast amounts of red tape and border controls — is one of the apparent paradoxes of UK trade policy.
Distance remains a crucial factor. Even a recent trade deal with Japan was deemed by a UK government study likely to increase British gross domestic product “in the long run by about 0.07 per cent”.
By contrast, the economic consequences of Mr Johnson’s “Canada-style” EU trade deal were assessed by the Treasury as likely to cut almost 5 per cent from the UK economy over the longer term.
David Henig, co-founder of the UK Trade Forum, said a Pacific deal would bring limited economic benefits to Britain and there was no guarantee that Ms Truss’s application would be accepted.
But Mr Henig said in terms of trade policy, there was merit in Britain joining a group of “like-minded” countries.
George Parker in London and Aime Williams in Washington