Post-Brexit, the UK’s global aspirations are being put into motion. Indeed, the UK Government has signed trade deals with, amongst others, Japan, Switzerland, Canada, Singapore, South Korea, Mexico and Australia. In particular, on 23 October 2020, the UK and Japan signed the Comprehensive Economic Partnership (CEPA) which could boost trade with Japan by an estimated £15 billion. Further, the UK announced a new trade deal with Australia on 15 June 2021. Indeed, this latest agreement is the first bespoke trade deal since the UK left the EU. In 2019-20, trade in goods and services between the UK and Australia was valued at £20.1bn.
Further, on 1 February 2021, the UK Government formally applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is a free trade agreement between 11 countries around the Pacific Rim and is now in force in 7 of those countries, being Australia, Canada, Japan, Mexico, New Zealand, Singapore and Vietnam. On 2 June, the CPTPP agreed to allow the UK to begin the process of joining the trading bloc.
These 11 countries have combined economies representing 13.4 percent of global gross domestic product (approximately US$13.5 trillion), making the CPTPP one of the world’s largest free-trade areas by GDP, along with the United States-Mexico-Canada Agreement, the European Single Market and the Regional Comprehensive Economic Partnership (RCEP). The RCEP is a free trade agreement between various Asia-Pacific nations and is the first free trade agreement between China, Japan and South Korea, three of the four largest economies in Asia.
In 2019, UK exports of goods and services to CPTPP countries amounted to £58 billion (8.4% of all UK exports) and imports were £53 billion (7.3% of the UK total). The UK now has trade agreements with 8 CPTPP members and is in the process of negotiating a free trade agreement with New Zealand. Although the UK is likely to conclude this soon and well before it accedes to the CPTPP, the economic benefits of CPTPP for the UK might be limited initially. However, the trading bloc would become even more important were the USA – which withdrew its membership – to come back on board, although this seems unlikely in the short term. Membership of the CPTPP would not for the most part clash with its trade deal with the EU.
The UK government sees geopolitical advantages in CPTPP membership, since it would put the UK at the centre of a network of countries in the Indo-Pacific region committed to free trade and the global rules underpinning international commerce, and it would strengthen its place in the region.
About the Author
Moray Hughes is a highly experienced litigator and dispute resolution lawyer who was admitted as a Solicitor in England & Wales in 1980 following two years spent as a trainee at Norton Rose. Moray deals with commercial and contractual disputes of a domestic and cross-border and multi-jurisdictional nature, and has practiced in the City of London for many years at a number of leading firms including Hill Dickinson and Simmons & Simmons, as well as in Hong Kong and in Australia where he was admitted as a Solicitor in New South Wales in 1984.
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