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UK Signs Pact to Join Pacific Trade Deal; Focus Turns to China

UK Signs Pact to Join Pacific Trade Deal; Focus Turns to China

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(Bloomberg) — The UK signed a treaty to join a Pacific trade deal on Sunday, formally becoming the first new member since the framework came into force and shifting attention to a list of other applicants led by China.

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Business and Trade Secretary Kemi Badenoch signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in New Zealand, the government said in a statement. New Zealand is chairing a meeting attended by 11 trade ministers and delegations from CPTPP economies.

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“The United Kingdom has come through the robust accession process and the overall quality of its commitments has set a good precedent for future economies that wish to join,” New Zealand Trade and Export Growth Minister Damien O’Connor said in a separate statement.

Formerly known as the TPP, the agreement at one time included the US and was seen as a way of containing China’s growing influence in the Asia Pacific. Former President Donald Trump withdrew the US from the pact in 2017 and China made its application to join in 2021.

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CPTPP-owned businesses employ 1% of UK workers, and membership is expected to “turbocharge investment” further, according to the UK government statement. British whiskey and cars are among 99% of current UK goods exports to CPTPP that’s set to be eligible for zero tariffs, it added.

“The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation and technology,” Ian Stuart, chief executive officer at HSBC UK, said in the statement. 

China Next

Beijing is next in sequential order to enter negotiations as the CPTPP seeks to expand, followed by Taiwan, Ecuador, Costa Rica, Uruguay and Ukraine. But China’s accession would be divisive, given tensions with existing members including Japan, Australia and next year’s chair, Canada.  

The 12 CPTPP members are: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the UK and Vietnam. The bloc, which is home to 500 million people, would account for 15% of global GDP with the inclusion of the UK joins, according to the International Monetary Fund.

Critics Slam Lobbying by Tech Giants in Indo-Pacific Talks

While the US last year established a rival pact known as the Indo-Pacific Economic Framework for Prosperity, it doesn’t include provisions for market access. China is not among the 14 members negotiating that agreement.