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UK starts talks to join £9tn Trans-Pacific partnership

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·2-min read
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International Trade Secretary Liz Truss arriving at BBC Broadcasting House in central London to appear on the BBC1 current affairs programme, The Andrew Marr Show. Picture date: Sunday April 25, 2021. (Photo by Dominic Lipinski/PA Images via Getty Images)
International Trade Secretary Liz Truss championed the potential deal as a gateway to post-Brexit trade. Photo: Dominic Lipinski/PA Images via Getty Images

The UK has commenced talks to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a £9tn ($12.5tn) free trade area home to 500 million people. 

The agreement currently includes some of the world's biggest economies across Asia-Pacific and the Americas, in a move the government says will give exporters and services firms better access.

The government said that under the deal exports to CPTPP countries are set to increase by 65% up to 2030 – £37bn. 

These benefits would, in theory, increase over time, with the Philippines, Thailand, Taiwan and the Republic of Korea all having expressed interest in joining, the government said.

The CPTTP currently includes Pacific Rim nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. If successful, the UK would be its second biggest economy after Japan.

Combined, these nations generate more than 13% of the world's income.

Despite it seeming like a diplomatic no-brainer, in the short-term the advantages of joining the set would be marginal for businesses and households, as the UK had deals with the majority of these nations already as part of EU membership which have been rolled over. 

Read more: FTSE rises as UK government borrows another £24bn

The only nations it doesn't currently have agreements with are Malaysia and Brunei, which account for less than 0.5% of total UK trade. 

The total gains are likely to be around 0.1% of GDP, according to the government. 

The government has argued that the deal should also benefit British farmers. With CPTPP countries set to account for 25% of global import demand for meat by the end of the decade, joining would support farmers selling high-quality produce like beef and lamb into fast-growing markets like Mexico.

"We left the EU with the promise of deepening links with old allies and fast-growing consumer markets beyond Europe, and joining the high-standards Trans-Pacific Partnership is an important part of that vision," said trade secretary Liz Truss. 

"Membership would help our farmers, makers and innovators sell to some of the biggest economies of the present and future, but without ceding control over our laws, borders or money. It is a glittering post-Brexit prize that I want us to seize."

Last week, the government announced it had agreed a deal in principle with Australia, a move which led businesses and trade groups to warn of the impact of agreeing trade deals without any outside input.

The government had heralded it as a post-Brexit win, and the biggest trade deal agreed from scratch since the UK's exit from the European Union.

Watch: Truss on Aus trade deal & 'compulsory' jabs

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