Britain Joins the CPTPP: Brexit's Biggest Trade Deal Yet?
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
This video discusses the CPTPP, a free trade agreement between 11 countries including the UK. It covers what it is, why the UK wants to join, and whether it's a good idea.
What is the CPTPP?
- The CPTPP is a free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and now the UK.
- Originally conceived by Barack Obama in 2009 as part of his pivot to Asia.
- Designed to create a trade block so big that China would eventually be tempted to apply and then use subsequent negotiations to pressure China into agreeing to regulations related to intellectual property and state-owned enterprises.
- Despite originating with the US and Obama Trump withdrew America from the block just three days after taking office because he believed that free trade agreements were generally bad for American industry.
- Today the countries involved in the CPTPP represent about 17% of global GDP making it one of the largest free trade agreements anywhere in the world even without American participation.
How does it work?
- Facilitates trade between its members by harmonizing certain regulations and reducing tariffs.
- Provides for a single set of rules of origin which prevent foreign goods from sneaking into the CPTPP and allows content from all CPTPP countries to be culminated.
- Includes chapters on things like labor rights Environmental Protections and state-owned Enterprises as well as a pretty robust enforcement mechanism.
Why does the UK want to join?
- Conservatives have been talking about joining since at least 2018 when International Trade Secretary Liam Fox started flirting with the idea.
- Many Brexiteers began pitching it as a partial post-Brexit replacement for the EU single market.
- The UK first applied to join on February 1st, 2021, trying to prove that it could make the most of its new Brexit freedoms having left the EU a year beforehand.
Is it a good idea?
- No conclusion was reached in this video.
UK Signs Free Trade Agreement with CPTPP
The UK has signed a free trade agreement with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This agreement is seen as a benefit of Brexit, but its impact on the UK's GDP is expected to be minimal.
Impact of Joining CPTPP
- Joining the CPTPP is not expected to make much difference in the short term, as it would only increase the UK's annual GDP by less than 0.1%.
- The UK already has free trade agreements with nine out of eleven countries in the block, which limits the overall impact of joining CPTPP on GDP.
- However, joining CPTPP could provide an opportunity for the UK to influence global trading rules and norms.
Potential Benefits
- The UK's trade with CPTPP members is growing fast, and Asia will soon become the world's preeminent consumer market.
- If more countries join in the future, it could massively increase the size of CPTPP and give the UK an opportunity to influence global trading rules and norms.
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