UK joins trans-Pacific bloc in historic post-Brexit trade move

CPTPP trade rules come into force for Britain, unlocking reduced tariffs with eight Pacific member countries

LONDON:

Britain officially became the 12th member of a trans-Pacific trade agreement, including Japan, Australia, and Canada, on Sunday as it aims to strengthen ties within the region and expand global trade connections following its departure from the European Union.

The UK announced last year its decision to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), marking its largest trade agreement since Brexit.

From Sunday, Britain will adopt CPTPP trade rules and benefit from reduced tariffs with eight of the existing 11 members: Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam.

The agreement will take effect with Australia on 24th December and with the final two members, Canada and Mexico, 60 days after their ratification.

This agreement introduces Britain’s first free trade deals with Malaysia and Brunei, while enhancing existing arrangements with other member countries. Notably, it provides businesses with greater flexibility through its "rules of origin" provisions.

Unlike the European Union, which Britain exited at the end of 2020, the CPTPP does not establish a single market for goods or services and does not require regulatory alignment.

The UK estimates the deal’s potential long-term value at £2 billion annually, representing less than 0.1% of GDP. However, the agreement carries strategic significance beyond economic benefits, allowing Britain to influence the potential membership of applicants such as China and Taiwan.

The CPTPP evolved from the US-backed Trans-Pacific Partnership, originally designed to counter China’s economic influence. After the US withdrew in 2017 under then-President Donald Trump, the agreement was rebranded as the CPTPP.