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Prime Minister Boris Johnson has promised joining the ‘powerful’ Pacific trading bloc ‘will mean lower prices on our supermarket shelves’.
Boris Johnson and Liz Truss discuss trade deal
It’s a glimmer of good news for the country after it emerged households could face £6,000 energy bills next year as the cost of living crisis deepens. Mr Johnson and Foreign Secretary Liz Truss said the deal – which could boost exports by £18billion – is expected to drive prices down.
International Trade Secretary Anne-Marie Trevelyan said business can start to matter until Britain joins the bloc, whose members have a combined GDP of £9 trillion. Negotiations should be completed by the end of the year. Proponents of the deal say it has a “key role to play in mitigating inflation and tackling the global cost of living crisis”.
Mr Johnson said: “Thanks to our top-notch trade negotiators and brilliant UK businesses, the UK is on course to become the first new country to join the Trans-Pacific Partnership.
“Becoming a member of this powerful trading bloc, which stretches from Canada to Japan, will mean lower prices on our supermarket shelves and open up a market of nearly half a billion people to British businesses.
“And the best news is that this is just the latest of more than 70 trade pacts we have entered into with countries around the world. Every day we use our newfound freedoms to create more choice for people at home and broaden the horizons of UK exporters overseas.
Winning membership in the trading bloc – officially known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – would be a major first achievement for a Liz Truss administration, and follows her work as international trade secretary .
She said: “As Prime Minister, I would make joining the Trans-Pacific Partnership a top priority. I have put the UK in the lead as Trade Secretary, and I will double as Prime Minister to ensure that our economy can continue to benefit from increased trade across the world.
“This will create huge opportunities for our businesses to boost their exports to some of the fastest growing markets in the world. And it will also help keep prices low on the shelves for consumers, through increased choice and competition.
Ms Truss added: “Joining the partnership will put the UK at the center of a growing partnership of like-minded economies, strengthening our hands and those of our allies against an increasingly assertive China on the world stage. This is a perfect example of the kind of advantage Brexit offers our country and I intend to seize it with both hands.
The CPTPP has been signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The government has stressed that its negotiators are “ensuring that we take the time necessary to ensure that we join on terms favorable to the interests and national priorities of the United Kingdom”.
Last month, representatives of CPTPP members met their British counterparts in Tokyo and the next round of negotiations will take place in early October. International Trade Secretary Ms Trevelyan encouraged businesses to prepare for the possibility of engaging in a market of around 500 million people.
She said: “This is one of the most exciting and valuable trading blocks in the world and businesses from all parts of the UK can start to rely on some of the huge opportunities available to them a once we become a member.
Trevelyan met with his foreign counterparts last October
“We could see an £18 billion increase in UK exports to CPTPP countries, thanks to duty-free trade between members. The gains will not only be felt by our exporters of refined products, such as whiskey distilleries and car manufacturers, but also as a global services superpower.
“Our leading technology and financial services companies will also benefit immensely from modern data rules as part of the partnership.”
It is hoped that UK exports to the CPTPP could reach £75 billion by 2030. Membership would mean that 99.9% of UK exports would be eligible to trade duty free with CPTPP members.
A spokeswoman for Conservative leadership candidate Rishi Sunak applauded the CPTPP’s potential, but warned against rushing negotiations, saying: “Outside the European Union, we have the opportunity to conclude trade deals around the world – and as someone who supported and believed in Brexit, Rishi is committed to doing so.
“The CPTPP is a great opportunity for sectors across the UK, but we need to take the time to negotiate properly and ensure that all sectors are treated fairly.”
Among those excited about the prospect of Britain joining the bloc is Andy Street, mayor of the West Midlands. He said: “Forging stronger trade ties around the world is vital for the UK – and indeed for the region I represent – if we are to thrive in a post-Brexit environment.
A Sunak spokesperson hailed the trade deal
“[The] the prospect of boosting our local efforts with a centrally-led international trade deal is music to my ears as we seek new pastures for growth and bounce back from the pandemic.
Britain’s auto industry, which employed more than 160,000 people in the UK in 2019, is set to get a major boost. Last year, car exports to CPTPP countries amounted to £2.2 billion. Exports of whiskey to CPTPP countries – which last year stood at £812m – are also set to increase.
Ian McKendrick of the Scotch Whiskey Association said: “Exports of Scotch Whiskey to CPTPP countries have increased significantly over the past decade, and the CPTPP has the potential to open up new opportunities for Scotch Whiskey and other British products in key markets in the region.”
John Longworth, former chief executive of the British Chambers of Commerce who now chairs the Independent Business Network, hopes membership will “create wealth” and “lower the cost of living”.
He said: “The Trans-Pacific Agreement not only connects us to our Commonwealth cousins in Australia, New Zealand and Canada, but also to some of the fastest growing, wealthiest and most innovative economies in the world. : Singapore, Korea and Japan for example.
“Britain is a center of high-tech engineering, biotechnology and artificial intelligence, as well as a major provider of services, including finance, which we can export. Importing cheaper goods and food will benefit the UK by reducing inflation and costs for individuals and businesses.
“Free trade is good; it stimulates efficiency through competition and innovation through specialization. In short, the Pacific Transpacific offers us enormous opportunities to develop trade and collaboration which will create wealth and jobs for the British people and reduce the cost of living.
Elizabeth Dunkley of the Center for Policy Studies described membership as an “exciting opportunity for global Britain”.
She said: “As well as being one of the largest free trade zones in the world, it cuts red tape and eliminates almost 100% of customs duties, helping to overburden trade, jobs and growth opportunities for UK businesses and consumers.
“[It] has the potential to increase GDP by an initial amount of £1.8 billion per year, which could grow to £20 billion as the CPTPP expands. Businesses, exporters and consumers across the UK will benefit from the cost savings and efficiencies that membership of the CPTPP will bring.
“Membership gives UK businesses greater flexibility in how they structure their supply chains, making them more diverse and, in turn, more competitive and resilient, with the added impact of reducing price.
“By lowering these barriers and facilitating free trade, the CPTPP has a key role to play in mitigating inflation and tackling the global cost of living crisis.”
CBI International Director Andy Burwell explained why UK businesses would welcome the new opportunities that CPTPP membership would open up.
He said: “In an increasingly divided and competitive world, it is essential that the UK stands up for free trade and builds strong partnerships for the future.
“The CPTPP is recognized for its liberal trade policy and the countries of the bloc will be significant economies as the industry seeks to diversify supply chains and provide the cost, choice and quality that customers and consumers expect. .
“The CBI will continue to work with government and wider stakeholders to ensure the negotiations reflect UK strengths and values and help businesses seize opportunities across the world.”