UK joins biggest trade deal CPTPP
The UK formally signed a treaty to join a major Indo-Pacific bloc CPTPP what it said was the biggest trade deal since the country left the European Union at the beginning of 2020.
What is CPTPP?
- The CPTPP is a landmark pact agreed upon in 2018 that cuts trade barriers among 11 countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
- The pact requires countries to eliminate or significantly reduce tariffs and make strong commitments to opening services and investment markets.
- It also has rules addressing competition, intellectual property rights and protections for foreign companies.
- CPTPP is seen as a bulwark against China’s dominance in the region, although Beijing has applied to join, along with Taiwan, Ukraine, Costa Rica, Uruguay and Ecuador.
Why is the CPTTP so important to the UK?
- The UK government says CPTTP will cut tariffs for UK exports to Asia Pacific countries and with UK membership, the trading bloc will have a combined GDP of 12 trillion pounds and account for 15% of global trade.
- Britain is keen to deepen trade ties in the Pacific after Brexit in 2020.
- London has been pushing a “Global Britain” strategy since it gave up EU membership after nearly 50 years, leaving the bloc’s single market and customs union.
- Since Brexit, the UK has sought other trade deals with countries and trading blocs around the world that the government says have faster-growing economies than the EU.
- The UK already has trade deals with 10 of the 11 other CPTPP members and the eventual economic boost is likely to increase GDP by just 0.08% annually.
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