Central Idea

The UK has formally signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a major Indo-Pacific trade deal.
Joining the bloc is seen as the UK’s biggest trade deal since leaving the European Union.

What is CPTPP?

The CPTPP, established in 2018, reduces trade barriers among 11 countries, including Australia, Canada, Japan, Mexico, and Vietnam.
Objectives of CPRPP include-

Tariff Reduction and Market Opening: The agreement requires countries to eliminate or significantly reduce tariffs and make commitments to open services and investment markets.
Addressing Competition and Intellectual Property: The CPTPP includes rules on competition, intellectual property rights, and protections for foreign companies.
Expanding Membership: While the CPTPP aims to counter China’s regional dominance, China and other countries such as Taiwan, Ukraine, Costa Rica, Uruguay, and Ecuador have applied to join.

Cutting Tariffs and Expanding Trade: The UK government anticipates reduced tariffs for UK exports to Asia Pacific countries. Joining the CPTPP expands trade opportunities, as the bloc represents 15% of global trade and a combined GDP of £12 trillion.
Post-Brexit Trade Strategy: After leaving the EU, the UK seeks to deepen trade ties with the Pacific region through its “Global Britain” strategy.
Seeking Faster-Growing Economies: The UK aims to establish trade deals with countries and blocs with faster-growing economies than the EU, given limitations in achieving agreements with major powers like China and the United States.

Economic Impact of Brexit: Critics argue that trade deals like the CPTPP will struggle to compensate for the economic damage caused by leaving the EU, which remains the UK’s largest trading bloc.
Long-Term Productivity Forecast: Brexit is projected to reduce the UK’s long-term productivity by 4%, according to the Office for Budget Responsibility.
Existing Trade Deals and Economic Boost: The UK already has trade deals with most CPTPP members, and the projected economic boost from joining the agreement is relatively modest at 0.08% annually.

Information Gathering Process: CPTPP members are assessing aspiring economies’ ability to meet the bloc’s high standards as part of the decision-making process for future membership.
Collective Decision-Making: The decision on new members and the timeline for their inclusion will be made collectively by existing CPTPP participants.