As per its foreign policy framework, which identifies China as an “epoch defining challenge,” Britain is strengthening its connections in the Indo-Pacific region.
On Friday, Britain announced that it had reached an agreement to become a member of a trans-Pacific trade pact consisting of 11 countries, including Japan and Australia. The aim of joining this pact is to strengthen connections with the region and enhance global trade relations following its departure from the European Union.
Chancellor Rishi Sunak commented in a statement that joining the CPTPP trade bloc would position the UK as a key player in a flourishing group of Pacific economies, and that the deal was proof of the tangible economic advantages resulting from the UK’s post-Brexit autonomy.
Since its departure from the EU in 2020, Britain has been seeking to establish global trade relationships and has shifted its focus towards fast-growing economies that are geographically distant. With China being deemed an “epoch defining challenge” within its foreign policy framework, Britain is strengthening its connections in the Indo-Pacific region.
The CPTPP consists of Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam, with Britain being the latest addition to the group. This membership serves as a supplement to the existing bilateral Free Trade Agreements (FTAs) between Britain and most of the member countries, providing businesses with additional options for trade terms.
Although the overall impact of the trade deal is expected to be modest, as it mainly focuses on reducing tariffs on cars, spirits, and dairy products, Britain anticipates a long-term boost of 1.8 billion pounds ($2.2 billion) to the economy, with potential for growth as more countries join the pact.
Sally Jones, who is a trade policy and strategy partner at EY, suggested that UK businesses should consider their regional presence since the Pacific Rim is predicted to expand at a rate twice as fast as Europe.
“The ease of trade is significantly enhanced by the CPTPP, and its membership is expected to expand as more nations express interest in joining.”
Following its exit from the European Union, Britain has established fresh trade agreements with Australia and New Zealand, and concluded a Free Trade Agreement (FTA) with Japan in 2020. The country is also currently negotiating new FTAs with Canada and Mexico, after carrying over the earlier EU trade agreements at the conclusion of 2020.”