Food and drink tariffs ‘to be cut’ in Pacific pact
Liz Truss: ‘lower tariffs promised for whisky producers’
The UK is poised to join one of the world’s largest free-trade zones which will cut tariffs for key sectors such as food and drink, cars and technology.
International trade secretary Liz Truss will announce on Monday that the UK will apply for membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, currently trading goods and services worth £110 billion.
The CPTPP is made up of 11 nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together they account for about 13% of global economic output.
According to the government the CPTPP would also create opportunities for industries including technology and services.
Under the deal, tariffs on 95% of goods traded between member nations are removed.
The CPTPP has been in place since 2018 and the UK is the first non-founding country to apply to join.
Prime minister Boris Johnson said: “One year after our departure from the EU we are forging new partnerships that will bring enormous economic benefits for the people of Britain.”
Mr Johnson added that applying to be the “first new country to join the CPTPP” shows the UK’s “ambition to do business on the best terms” with “friends and partners” across the globe.
Ms Truss said that joining CPTPP will create big “opportunities for UK businesses” that “weren’t there as part of the EU” and deepen Britain’s “ties with some of the fastest-growing markets” in the world.
She added: “It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home.”
The trade secretary said that formal negotiations are due to commence in the coming months.
Emily Thornberry, Labour’s Shadow International Trade Secretary, said: “Like any other trade agreement, the advantages of joining the CPTPP will have to be assessed once we see the terms on offer. At present, Liz Truss cannot even guarantee whether we would have the right to veto China’s proposed accession if we join the bloc first.
“More generally, people will rightly ask why we have been through five years of debate in Britain over leaving a trade bloc with our closest neighbours only to rush into joining another one on the other side of the world without any meaningful public consultation at all.
“The government’s own national survey published last August showed that almost 80 per cent of respondents had never heard of the CPTPP or didn’t know what it was. So as a basic first step, Liz Truss needs to stop and ask the British public what they think, before she rushes off to start negotiating on our behalf.”
The Federation of Small Businesses (FSB) national chairman Mike Cherry said that an agreement would mean that a “huge market would suddenly become a lot more accessible to small businesses”.
According to the FSB, 45% of small businesses have said that they see the CPTPP region as a “priority market to access over the next three years.”
Adam Marshall, director general at the British Chambers of Commerce, said: “A new partnership with one of the world’s largest free trade areas would only be a good thing for our business communities.
“Firms will be keen to see the UK and members of the Comprehensive and Progressive Trans-Pacific Partnership forge a deeper trading relationship, and we will work with the government to maximise this opportunity for UK businesses.
“However, we must not forget the single most critical trade agreement for our business communities remains the one we have with the European Union.”
Analysts say that while a deal would be welcome the gains from joining the pact will be marginal.
The UK already had trade deals with most of these nations and it is in talks with Australia and New Zealand, so that leaves just Malaysia and Brunei.
CPTPP nations account for about 9% of UK exports, which is less than the UK exports to Germany.