Britain signs deal to join £12tn Indo-Pacific trading bloc

LONDON — Kemi Badenoch, Britain’s business and trade secretary, has formally signed a treaty confirming adherence to the vast CPTPP Indo-Pacific bloc, the country’s biggest post-Brexit trade deal to date.

Signed in New Zealand on Sunday, the deal will now receive parliamentary scrutiny in the UK, while other CPTPP nations will also complete their own legislative processes. More than 99% of current UK goods exported to CPTPP countries will soon be eligible for zero tariffs, the UK government has said.

the 11 members Comprehensive and Progressive Trans-Pacific Partnership Agreement includes Canada, Mexico, Japan, Australia, Vietnam, Singapore, and Malaysia, among others. Britain would be the first European nation to join the bloc, which the government says would unblock trade with a region with a total GDP of 12 trillion pounds ($15.7 trillion).

How much the deal actually benefits Britain’s growth prospects remains to be seen. Based on the government’s own estimates, the deal will raise long-term domestic debt GDP in only 0.08%, that it will have little impact in offsetting European trade losses as a result of Brexit. The UK officially left the EU on January 31, 2020.

Badenoch said on Sunday Britain was using its status as an independent trading nation to join an “exciting, growing and forward-thinking trading bloc”.

“(This) will help grow the UK economy and build on the hundreds of thousands of jobs that CPTPP-owned businesses already support across the country,” it said in a statement. One in 100 workers in Britain was employed by a company based in a CPTPP nation, according to the government citing data from 2019.

Badenoch added that the deal would “open up tremendous opportunities and unprecedented access to a market of more than 500 million people.”

The trade pact evolved from the now-defunct Trans-Pacific Partnership, or TPP, which originated in the United States but fell apart after former President Donald Trump ruled out the involvement of the United States.

Sean McGuire, Europe director for the Confederation of British Industry, said the deal, coupled with Britain’s strategic global trade agenda and foreign trade, had the “potential to drive export-led growth in critical sectors, such as services and green technology, while also making our supply chains more resilient.”

“As one of the largest deals globally, including some of the world’s most dynamic markets, UK companies will be seeking new business and investment opportunities,” it said in an emailed statement.

—CNBC’s Sumathi Bala contributed to this article.