Context

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.