The UK has become the first European country that has joined the Comprehensive and Progressive Agreement for Transpacific Partnership (CPTPP) whose membership process was completed on March 31, 2023. Countries that are already its members include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
CPTPP was previously known as Trans-Pacific Partnership Agreement (TPPA) or simply TPP. In 2009, then US President Barak Obama had given the idea to create this trade bloc, big enough to fulfil his vision of ‘Pivot to Asia’. All was set and founding members were time-lined to sign the FTA in 2018 when Donald pulled back from the agreement just three days after moving into the White House as he was (is) of the view that free trade is bad for the US economy. Since Trump won the election as a protectionist, he was against any policy that directly or indirectly shared US bread with anybody except ‘century-old Americans’. Nevertheless, all other founding members renamed on 10 November 2017 the initiative as CPTPP and decided to continue working together for the free trade initiative.
CPTPP is based on two principles: harmonise regulations; and zero or in a few cases reduced tariffs among member countries. The trade value of the group is 17% of the total global GDP, equivalent to 11 trillion euros. World’s one-third population makes the bloc a future consumer market of 500 million customers, making the Indo-Pacific a hub of two-thirds of the global economy in 2030.
The UK first tried to join the CPTPP back in 2021 but extensive and tedious negotiations were revolving around the idea of how free the UK is from the EU trade regulations after Brexit. Later, Windsor Framework smoothed the course and the UK finally got the CPTPP membership.
British Prime Minister Rishi Sunak is of the view that joining the CPTPP puts the UK at the centre of a dynamic and growing group of pacific economies, as the first new nation and first European country to join. He believes that British businesses will now enjoy unparalleled access to markets from Europe to the South Pacific and this deal demonstrates the real economic benefits for “our post-Brexit freedoms”.
UK’s trade with CPTPP member countries amounted 60.5 billion pounds in the last 12 months and this agreement will add 1.8 billion pounds in the long run. Moreover, the UK has already signed FTA with nine of the 11 member countries pre-Brexit. The scenario leads to the question of why the UK wanted membership if it is not boosting its economy or if it even has similar trade agreements already with 9 of the 11 member countries. Experts believe that joining CPTPP is more of a political move than economic.
According to a report by the Centre for Strategic and International Studies, David Henig, the director of the UK Trade Policy Project at the European Centre for International Political Economy, reckons that the move to join the CPTPP is “more about the politics than economics”. The report further says that “Joining the CPTPP has been touted as a key pillar within that framework as London seeks to engage with Asia more deeply in not only trade but also defense and diplomacy”. Now with the UK part of CPTPP, it will be interesting to see who all is in the line of applicants. Chine of course has also applied for the membership in September 2021.
UK’s presence in Indo-Pacific is now going to multiply after the creation of defence pact AKUAS as well as the signing earlier this month of a nuclear-powered submarine deal with the US and Australia. The western agenda of “containing China” right in its neighborhood, “Indo-Pacific” has geared up recently, and now China is also on the waiting list for CPTPP membership. Since every member state enjoys veto power on the addition of new partners, the UK can hamper China’s entry into the bloc.
Experts are right in saying that CPTPP apparently has no economic significance for a stable economy such as the UK but it will definitively have some leverage for it in the Indo-pacific sphere. It is not a matter of why the UK decided to agree on the kind of trade agreement it already has with nine of the 11 countries, but the core purpose is to maximise the presence of the global north in the global south.
Published in The Express Tribune, April 12th, 2023.
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