The government has signed an agreement to join an Indo-Pacific trading bloc, although the estimated benefit could only be £1.8bn in GDP.
In announcing the formal plans to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Rishi Sunak administration highlighted the £12trn value of the combined GDPs of all the member nations if the UK is included.
But the government already has free-trade deals with all the member nations, aside from Brunei and Malaysia.
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And analysis provided to the government estimates the new agreement will boost UK exports by £1.7bn, imports to the UK by £1.6bn and GDP by £1.8bn in the long term.
Speaking to Sophy Ridge on Sunday, Trade Secretary Kemi Badenoch said these figures needed to be examined in the context of the benefits of being a member of a trading bloc.
She said: “The contents of the free trade deals that we have with these countries is different from what we’re getting with CPTPP.
“That’s why it’s called the comprehensive – as well as progressive agreement – for the trans-Pacific partnership.
“There is one additional country, which is Malaysia, that we have no agreements whatsoever with, but it isn’t just about whether or not we have an agreement.
“We’ve got agreements with many different countries – it is about the size, shape and scale and the cumulative impact of things like rules of origin, which are pooled between this trading bloc.”
It is not the first time the government has lauded its own efforts with CPTPP, with Ms Badenoch and Mr Sunak praising the UK being accepted into the bloc in March.
The UK was already set to benefit from its agreements with the CPTPP regardless of the next phase of membership, with exports estimated to rise by 65% by the start of the next decade – valued at £37bn.
Ms Badenoch pointed out that the Indo-Pacific is forecasted to be where half of global growth will come from by around the middle of the 2030s, and will continue growing into the middle of the century.
Outside the UK government, there was more of a muted welcome for the UK’s joining the bloc.
Chris Devonshire-Ellis, the chairman of Dezan Shira & Associates which works with investors across Asia, spoke to the Nikkei overnight.
He said: “The impact appears mainly cosmetic, for the UK to show it made a trade deal after Brexit.”
Labour’s shadow trade secretary, Nick Thomas-Symonds, said progress in the Indo-Pacific was “long overdue”.
He added: “The government’s own assessment says CPTPP is worth just 0.08% to UK GDP.
“So ministers also need to set out how this will help the economy and what support will be given to businesses to access any export opportunities.
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“The government’s trade record is: OBR predict UK exports to fall by 6.6% in 2023, a hit of over £51bn; No promised US or India trade deals; Their own MPs criticising the Australia deal.
“This costs the UK growth and jobs – making the Tory economic crisis even worse.”
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