Out of Europe, Britain looks to the Pacific for new trade partners
It may be on the other side of the world, but that’s not stopping the U.K. from applying to join a trade partnership in and around the Pacific Ocean. A year after it formally left the European Union, the British government said that it wants to join the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
International Trade Secretary Liz Truss is set to speak to officials in Japan and New Zealand on Monday to formally make the request. Negotiations are expected to commence this year. The government says joining the partnership would deepen ties with fast-growing economies, including Mexico, Malaysia and Vietnam.
The United States, the world’s biggest economy, is not part of the partnership; former President Donald Trump, withdrew the country from its predecessor, the Trans-Pacific Partnership. China, the world’s No. 2 economy, also does not belong.
The U.K.’s aim in joining is the benefit of lower tariffs for the British economy. The government says the partnership removes tariffs on 95% of goods traded between members.
It is a much looser arrangement than the one for members of the EU, which the U.K. formally left on Jan. 31, 2020, since the Trans-Pacific agreement does not involve deep political integration. “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,” Prime Minister Boris Johnson said.
The U.K.’s trade with the partnership was worth 111 billion pounds (about $152 billion) in 2019, with Japan accounting for near one-quarter. Though substantial, the amount is around six times less than the business the U.K. conducts with the EU.
Late last year, the British government signed a free trade deal with the EU that sees zero tariffs and quotas on traded goods, although there are other costs to business from increased form-filling and customs checks.
Supporters said one of Brexit’s main benefits lies in the U.K.’s ability to forge its own trade deals around the world. The EU negotiates trade deals on behalf of its member nations, which now number 27 following the U.K.’s withdrawal from the bloc.
The British government insisted that the National Health Service and the price it pays for drugs are not for sale in any trade negotiations and that it will not sign trade deals that compromise high environmental protections, animal welfare and food standards.