The United Kingdom (UK) has recently acceded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Asia-Pacific trade treaty:
Asia-Pacific Trade Agreement (APTA) is a preferential regional trade agreement formerly known as the Bangkok Agreement.
APTA aims to promote economic development of its members through the adoption of mutually beneficial trade liberalization measures that contribute to regional trade expansion and economic cooperation.
Over time it refocused from the initial negotiation of tariff concessions on merchandise trade to at present negotiating liberalization in investment, services trade and trade facilitation.
It is also continuously working on improving and modernizing its Rules of origin for trade in goods.
Member countries:
Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.
The CPTPP was signed by the 11 countries on 8 March 2018 in Santiago, Chile.
It accounts for nearly 13% of global GDP.
Significance:
Boost to GDP: The deal would add GDP 1.8 billion ($2.2 billion) annually to the U.K. economy in the long run. This, however, translates to a modest boost of 0.08% to GDP.
Post Brexit Freedom: Prime Minister Rishi Sunak describing the outcome as an example of “post-Brexit freedoms”, which will help Britain’s economy.
Gateway to Indo-pacific: The government said the deal was a “gateway” to the Indo-Pacific region which would account for a majority (54%) of global economic growth in the future.
Benefits to companies: Once Britain becomes a member of the bloc, U.K. firms will not need to establish a local office or be resident to provide services and will be able to operate on a par with firms in host countries, the government said.
What’s good about TPP?
New economic growth: Those in favour say this trade deal will unleash new economic growth among countries involved.
Improve people’s living standards: It is being said that the TPP has high potential to improve people’s living standards by facilitating the free cross-border movement of key factors of economic activity, such as goods, people, money, and information.
Failure to bring the TPP into force would be a great loss to not only the TPP countries such as Japan and the US but also the global economy.