The UK’s Joins the CPTPP

The “success stories” from our exit from the EU have been almost nonexistent, but have no fear, as the government has just announced that the UK will be joining the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP). So, isn’t that wonderful?

Well, in some respects, it is! For example, if you are a Brexiter, then this announcement will let you rub salt in the wounds of those who wanted to stay in the EU as you gloat about the freedoms Brexit has brought upon our nation. For others, it is just another meaningless announcement that doesn’t offer the UK much in the way of economic growth that membership in the EU offered.

What is it?

To understand this agreement fully, we need to take a deep dive into the CPTPP.

The CPTPP is a trade agreement that exists between 11 member states: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. This eleven-member partnership has a combined economy that represents around 13.4 per cent of the global Gross Domestic Product (GDP). All of the members of this agreement can only be found around the Pacific Ocean.

Pros

The new deal offers the UK better access to one of the fastest-growing regions of our planet. As the countries that are currently part of the agreement have a combined GDP of US$13.5 trillion and a total population of around 500 million, this is by no means an insignificant trade agreement.

The agreement has also attracted the attention of other countries that are eager to join. The following have already submitted their applications:

• China
• Taiwan
• Ecuador
• Costa Rica
• Uruguay
• Ukraine

Other countries have publicly stated they are interested in joining but have yet to make a formal application.

• South Korea
• Thailand
• Philippines
• Indonesia
• Colombia

All this interest would surely benefit the UK by exposing it to a larger, more diverse market.

One controversial possible addition to this group is China, which wants to continue to build up a stronger economy and increase its influence.

Cons

This new deal, according to the UK Government, will increase the UK’s economy by 0.08% over the course of 10 years, which is hardly anything. According to the World Bank, the UK’s GDP sits at $3.131 trillion, which means 0.08% would equate to around a $2.5 billion increase split over the 10-year period. Now, when we compare this to the 4 to 5% of GDP we lost as a result of our exit from the EU, this new deal seems pretty weak.

The final point builds upon the “0.08%” increase. The main reason for such a small increase is due to the great distance between the UK and the other members of this agreement. The closest country is Canada.

My Thoughts

The UK joining this trading group could, in the long run, prove to be a great addition to the country’s economy, especially if countries like the United States join, which previous President Donald Trump was very much in favour of. However, the figures that the government is citing do not look very appealing, and this whole announcement seems more like a weak brag about the “freedom” that the post-Brexit UK has than anything else.