Atlanta/Hong Kong (CNN) Britain has reached an agreement to join a major free trade bloc in the Pacific region.
The country will become the first new member state and the first in Europe to join the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) from then on. entered into force in 2018.
Although the government described the agreement as “the largest trade deal since then Britain’s exit from the European UnionIts own estimates suggest that joining the CPTPP would increase UK economic output by less than 0.1% in the long run, or over about 15 years.
British Prime Minister Rishi Sunak said: “We are at heart an open, free-trade nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms.” Friday.
The bloc includes more than 500 million people and will be worth 15% of global GDP once the UK joins, Sunak’s office said.
CPTPP is a free trade agreement with 11 countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. It succeeded in the Trans-Pacific Partnership after the United States He withdrew under former President Donald Trump in 2017.
The UK agreement comes nearly two years after it began talks to join the pact.
Joining the CPTPP is unlikely to be a turnaround for the UK economy. Britain has already concluded trade deals with nine of the current eleven members.
Nor will the agreement offset the hit to gross domestic product (GDP) from leaving the European Union. The UK Office for Budget Responsibility, which issues economic forecasts for the government, expects Brexit to cut Britain’s output by 4% over 15 years compared to staying in the bloc.
Becoming a member of the CPTPP means that more than 99% of the UK’s exports to 11 other countries will now be eligible for duty-free trade. This includes major exports such as cheese, cars, chocolate, machinery, gin and whisky.
In the year ending September 2022, the UK exported £60.5 billion ($75 billion) worth of goods to CPTPP countries, Sunak’s office said. statement.
She added that dairy farmers, for example, sent products such as cheese and butter worth 23.9 million pounds ($29.6 million) to Canada, Chile, Japan and Mexico last year, and were set to “benefit from lower tariffs”.
The deal also aims to cut Red tape for British companies, which will no longer be required to set up local offices or be resident in the agreement’s member states to provide services there.
Services accounted for a significant part – 43% – of all UK trade with CPTPP members last year, according to Sunak’s office.
“As part of the CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation,” said Sunak.
Many companies expressed their support for the deal in the government statement, including the World Bank Standard Chartered (SCBFF) And the maker of souls Pernod Ricard (PDRDF).
Joining the agreement “represents a huge opportunity for our Scotch whiskey business,” said Anishka Jelicich, UK public affairs director at Pernod Ricard.
“Five of our top 20 export markets are CPTPP members. We expect tariff reductions and smoother access to some of the world’s fastest growing economies to increase exports, secure jobs and investment in the UK, while doubling sales in some markets.”
However, the UK Trade and Business Commission criticized the deal.
“When it comes to trade, distance matters. Not only will joining this bloc fail to replace the trade we’ve lost with our closest neighbours, but expanding supply chains makes a mockery of our climate commitments and will undermine the UK’s environmental and food standards,” said Caroline Lucas, Parliamentary and member of the commission, in a statement.
Olesya Dmitrakova and Hanna Ziadi contributed to this report.
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