UK launches bid to join Asia-Pacific trade pact

Business chiefs have applauded the UK government's decision to apply to join the 11-nation Trans-Pacific Partnership (TPP), one of the world’s largest free-trade zones.

David Sapsted

1 February 2021

International Trade Secretary Liz Truss formally applied on Monday for membership of the TPP - renamed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) after Donald Trump withdrew the US from the bloc shortly after he assumed the presidency in 2017 - and said she expected negotiations to begin in the next few months.Membership of the TPP currently comprises New Zealand, Brunei, Malaysia, Australia, Canada, Chile, Japan, Mexico, Peru, Singapore and Vietnam, which together account for about 13 per cent of global economic output.In fact, the UK already has post-Brexit trade agreements with several TPP members and is negotiating new deals with the likes of Australia and New Zealand.However, the big prize could rest in the hands of President Joe Biden, who indicated last year that rejoining the TPP was top of his trade agenda. If the US did so and the UK's membership were to be approved, it would effectively give London a backdoor route to a trade deal with Washington.Under the TPP agreement, tariffs on 95 per cent of trade between member nations are being removed or reduced, although charges are retained to protect specific indigenous products, such as Japanese rice and Canadian dairy. Additionally, TPP countries remain free to strike individual trade deals with other nations.Ms Truss said: "In future it's going to be Asia-Pacific countries in particular where the big markets are, where growing middle-class markets are, for British products.“It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home.”

Cementing relations with the Asia-Pacific region at the heart of UK trade growth

Miles CEO of the financial services trade body TheCityUK, said the UK’s application to join the TPP "sends the clearest signal yet that Britain is determined to make the case for open global markets and trade, and to be ambitious and outward-looking in its trade and investment policy".He added: “Joining the CPTPP will allow the UK to work with its other members on key priority areas for services industries such as ours, including data, cross-border payments, and the mutual recognition of professional qualifications."The British services industry is world leading, and offers a mutual benefit for the rapidly growing middle class in the region. Moreover, joining CPTPP offers a further platform to make the case for open markets and the liberalisation of services trade, a significant prize for the UK and the global trading system.”Adam Marshall, director-general of the British Chambers of Commerce, said that a new partnership with one of the world’s largest free trade areas could only be good for the nation's businesses. “However," he added, "we must not forget the single most critical trade agreement for our business communities remains the one we have with the European Union.”Mike Cherry, who chairs the Federation of Small Businesses (FSB), said that, if the UK succeeded in joining the bloc, it would mean that a “huge market would suddenly become a lot more accessible to small businesses".According to a recent FSB survey, 45 per cent of SMEs regarded the Asia-Pacific region as a priority market to access over the next three years."Crucially, at the very heart of this agreement is an SME chapter, meaning that the interests of small businesses have been seriously thought about and they will hopefully be able to positively gain from this," Mr Cherry said."The agreement contains cutting-edge provisions to help businesses trade, including self-certification of rules of origin, removal of barriers to the free flow of data, and extensive commitments on the temporary entry of business persons.”