The United Kingdom wants to develop unfettered trade links around the world to offset upheavals from Brexit, but its move to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, presents limited benefits, analysts said.
He Yun, an associate professor at the School of Public Administration at Hunan University in Changsha, said the UK government needs to prove that it is capable of negotiating trade deals after the country’s departure from the European Union, and the CPTPP constitutes low-hanging fruit.
“The CPTPP’s benefits for the UK economy will be limited,” she said of the country’s sought-after participation in a free-trade zone centered on the Asia-Pacific region. “First, distance matters in trade. Air and sea freight carrying goods will be too expensive for the CPTPP to substantially lower the costs of the UK to trade with the rest of the bloc.
“Second, what the UK needs most is to expand the international markets for its services, which is suffering as a result of losing its passporting right to the EU market. But the CPTPP is thin on services.”
Moreover, there is the problem of how the UK will set its priorities in deploying its trade negotiators for talks. The country needs to start negotiating trade deals or updates on most or all of its continuity agreements with more than 60 countries, and the UK-EU deal itself, she said.
“Joining in the negotiation of CPTPP right now will further stretch its negotiating manpower and could potentially hurt its other negotiations.”
The United Kingdom made a formal request to join the CPTPP on Feb 1 in meetings with ministers from Japan and New Zealand. The 11-member free-trade area comprises nations of Asia and the Pacific Rim, covering 500 million people. It represents about 13.5 percent of the global economy.
Liz Truss, the UK’s secretary of state for international trade, said membership would help create jobs, rebuild the global trading system and put Britain “at the heart of some of the world’s fastest-growing economies”.
The move comes a year after Britain formally exited the EU, and it has since been in desperate need to find a new lease of life both economically and politically.
Negotiations between Britain and the CPTPP signatories are expected to start this year, the trade department said.
Transparency questioned
Emily Thornberry, the shadow international trade secretary for the opposition Labour Party in the UK, questioned the government’s lack of transparency concerning its intentions for the pact. She said people would question the UK government’s decision “to rush into joining another one on the other side of the world without any meaningful public consultation at all”, after long negotiations over Brexit agreements.
Xu Liping, a researcher at the National Institute of International Strategy of the Chinese Academy of Social Sciences, said the UK’s announcement that it wants to join the CPTPP could serve as a useful signal to the world that the country is still interested in working with other countries.
Jon Geldart, director-general of the United Kingdom Institute of Directors, said that as the UK has left the EU, there is now the opportunity to develop unfettered links around the world in terms defined by the government.
“The world has changed and Britain is hoping to be ahead of the game. Leaving the EU has been difficult and UK business is enduring a painful divorce but future trading options with significant new markets offer opportunities,” he said, adding that the UK business sees strong connections with China and looks to more cooperation with Chinese companies.
Agencies contributed to this story.
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