LONDON, Dec 15 (Reuters) – On Sunday, Britain officially became the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade pact that includes Japan, Australia, and Canada. This move is part of Britain’s strategy to strengthen its ties in the Indo-Pacific region and enhance global trade links following its departure from the European Union.
The UK had announced its intention to join the CPTPP last year, marking its largest trade agreement since Brexit. As a member, Britain will benefit from the trade rules and reduced tariffs with eight of the 11 current members: Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, and Vietnam.
The agreement will enter into force with Australia on Dec. 24 and will apply to the final two members—Canada and Mexico—60 days after they ratify it.
The pact marks Britain’s first free trade deals with Malaysia and Brunei. Although the UK had agreements with the other countries, CPTPP provisions go further, particularly by offering companies more flexibility in how they use “rules of origin” provisions.
Unlike the EU, which requires regulatory harmonisation and from which Britain departed at the end of 2020, the CPTPP does not establish a single market for goods or services.
Britain estimates that the pact could be worth 2 billion pounds ($2.5 billion) annually in the long term, representing less than 0.1% of GDP.
However, the agreement holds strategic, as well as economic, significance. It gives Britain the ability to influence whether China and Taiwan can join the group.
The free trade agreement originated from the U.S.-backed Trans-Pacific Partnership, which was partly designed to counter China’s expanding economic influence.
The U.S. withdrew from the agreement in 2017 under then-President Donald Trump, and the pact was reformed as the CPTPP.
Costa Rica is the next country to begin the process of joining, with Indonesia also planning to apply.
($1 = 0.7931 pounds)