Source: The post is based on the article “U.K. to join Asia-Pacific trade treaty” published in The Hindu on 1st April 2023
What is the News?
The UK has agreed to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
What is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)?
The CPTPP is a free trade agreement(FTA) between 11 countries: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. It was signed in 2018 in Santiago, Chile.
The agreement evolved from the Trans-Pacific Partnership(TPP) which was never ratified due to the withdrawal of the United States.
The UK will become the 12th member, and the first to join the partnership since its inception.
What are the benefits to the UK of joining CPTPP?
Economic benefits: British exports to CPTPP countries were worth 60.5 billion pounds in the twelve months to end-Sept. 2022. Membership of the grouping will add another 1.8 billion pounds each year in the long run, and possibly more if other countries join.
Gateway to Indo-Pacific: The deal was a “gateway” to the Indo-Pacific region which would account for a majority (54%) of global economic growth in the future. The U.K. is currently also negotiating a “free trade” deal with India.
Geopolitical benefits: the UK will get a veto on whether China joins the treaty. China has applied to become a member of the bloc in September 2021.
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