According to comprehensive media reports, the 11 member states of the “Comprehensive and Progressive Trans-Pacific Partnership Agreement” held an online ministerial meeting on Friday (March 31) and reached a consensus on the accession of the United Kingdom, accepting the United Kingdom as the 12th member of the agreement. A member, UK Trade Secretary Kemi Badenoch (Kemi Badenoch) confirmed the news on the same day.
This means that this multilateral free trade agreement, which is regarded as the most advanced in the world and has taken more than ten years from conception to implementation, has welcomed the founding signatories for the first time since it came into effect in December 2018 – Japan, Canada, Australia, Chile, New Zealand, New members outside of Singapore, Brunei, Malaysia, Vietnam, Mexico and Peru.
Cammy Badnotch pointed out that joining the CPTPP shows that the British government has made good use of her ability to freely formulate trade policies after leaving the European Union to find new markets in the world to develop the economy. She added that joining the CPTPP would give British businesses easier access to the Indo-Pacific region, a region seen as leading future growth.
According to the report, the CPTPP will develop into an economic circle including Europe, based on a framework centered on the countries surrounding the Pacific Ocean. Japanese Chief Cabinet Secretary Hiroichi Matsuno said at a press conference: “This is of great significance to the formation of a free and fair economic order.”
The TPP is characterized by a high tariff cancellation rate and a high degree of freedom in investment and e-commerce. TPP will phase out tariffs on 99% of varieties. In terms of industrial products, tariffs will be canceled for 99.9% of the varieties. The rules include ensuring the transparency of data flows, prohibiting forced labor, and reducing and canceling preferential policies for state-owned enterprises. This is a provision not found in other free trade agreements (FTAs), also known as the “gold standard”.
Unlike the EU, the CPTPP is neither a single market nor a customs union, so countries do not need to have the same regulations and standards. At the same time, countries within the agreement are free to enter into their own trade agreements with other countries.
The Japanese Economic News (NIKKEI) pointed out that the UK intends to seize the demand brought about by the future development of Asia by joining the CPTPP. Another intention is to regain its presence in the international community after leaving the EU. As a major post-Brexit policy, the United Kingdom has proposed “strengthening its participation in the Indo-Pacific region.” The UK, which strengthens its participation in the Asian market, has the same interests as the TPP members who want to expand their economic circles.
The British Ministry of Commerce and Trade stated that the gross national product of the original 11 CPTPP countries will reach 11 trillion pounds in 2021, equivalent to approximately 13.6 trillion U.S. dollars. In the year to the third quarter of last year, the trade volume between the UK and CPTPP countries was 111.1 billion pounds, accounting for 6.8% of the UK’s trade volume. During the same period, the UK exported £60.5 billion to CPTPP countries.
However, according to the estimates of the British government, joining the CPTPP will only increase the British economy by 0.08%, while leaving the EU will reduce the growth of the British economy by 4%.
Some experts also believe that the UK’s accession to CPTPP requires further adjustment of trade rules to member countries, which will make the UK further away from the EU. Sam Lowe, a partner at UK business management consultant Flint Global, told The Guardian that joining the CPTPP would make it harder for the UK to rejoin the EU’s customs union. He also said that the UK does not seem to need to significantly adjust the rules inherited from the EU, showing that the EU and CPTPP rules are compatible.
The British Minister of Commerce and Trade, Cammy Badnotch, pointed out on the British Broadcasting Corporation (BBC) radio program that the outside world should not analyze the advantages and disadvantages of joining CPTPP from a short-term perspective, but should treat it as if investing in a start-up company, focusing on the potential for growth .
According to Wikipedia, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, formerly known as the Trans-Pacific Partnership (English: The Trans-Pacific Partnership, TPP), originally had 11 members, including Australia, Brunei, Canada, and Chile. China, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam have a total population of about 500 million, and their gross national product is about 15% of the world.
Originally initiated by members of the Asia-Pacific Economic Cooperation Conference, it is a group of multilateral free trade agreements that have been brewing since 2002, aiming to promote trade liberalization in the Asia-Pacific region. Article 1.1.3 of the Trans-Pacific Partnership Agreement stipulates: “This organization supports the Asia-Pacific Economic Cooperation Conference, promotes the liberalization process, and achieves the goal of free and open trade.”
On January 23, 2017, US President Trump (Donald Trump) signed an executive order, and the US withdrew from the TPP. On November 11 of the same year, the TPP was restructured into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and at the same time, 22 articles advocated by the United States but opposed by most members were frozen.
On January 23, 2018, representatives of all parties decided to sign the agreement in Chile in early March of the same year. On March 8 of the same year, the signing ceremony was held in Santiago, Chile, and was jointly signed by Japan, Canada, Australia, New Zealand, Malaysia, Singapore, Vietnam, Brunei, Mexico, Chile and Peru. On December 30 of the same year, the agreement came into effect.
In January 2018, the British government stated that after Brexit, the UK is committed to becoming a CPTPP member to promote its exports, and has held informal discussions with CPTPP members. The United Kingdom is also a Pacific country in a broad sense because it is located in the Pitcairn Islands, an overseas territory in the Pacific Ocean. In October 2018, Japanese Prime Minister Shinzo Abe welcomed the UK to join. On January 31, 2021, the UK formally applied to join the CPTPP, becoming the first non-founding member to apply for membership, and decided to start negotiations on joining the agreement in June. The former member states that conducted the review demanded that the UK accept high levels of trade liberalization and rules, and the process took more than two years.
International experts pointed out that the UK has become the first country outside the Indo-Pacific region to join a trans-Pacific trade agreement. This move may not be of great significance to the UK’s economic development in the short term, but it can be said to be an important geopolitical development.
The latest “Integrated Review” (Integrated Review) defense diplomacy document released by the UK also reiterated that the UK is turning to the Indo-Pacific region, and the CPTPP provides a core policy framework that allows the UK to have strategic links with countries with similar ideas. Safeguard the freedom and openness of the Indo-Pacific region.