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One year after officially leaving the EU, the UK has confirmed it will request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).
The Pacific free trade bloc, which was established in 2018, covers a market of around 500 million people and member nations include Australia, Canada, Japan and New Zealand.
Formal negotiations are set to start this year and if successful the UK would be its second biggest economy after Japan.
International Trade Secretary Liz Truss said: “Joining CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU. It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home. We’re at the front of the queue and look forward to starting formal negotiations in the coming months.”
What would it mean for the UK?
The Department for International Trade says becoming a member of the £9tn bloc would “deepen the UK’s access to fast-growing markets and major economies”, including Mexico, Malaysia and Vietnam. UK trade with the group was worth £111bn in 2019, growing by 8% a year since 2016.
“It sounds a win-win,” says the BBC’s Dharshini David. However, in practice, the “short-terms gains for households and business would be limited”. David adds: “The UK already has trade deals with seven of the 11 nations – and is pursuing two more. In total, CPTPP nations account for less than 10% of UK exports, a fraction of what goes to the EU.”
Who is in the trading bloc?
The CPTPP is a trading agreement between 11 Pacific Rim nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It is the third largest free-trade area in the world by GDP, after the North American Free Trade Agreement and the European single market.
When was it formed?
The first trans-pacific partnership (TPP) was signed in February 2016. The United States was among the signatories, but former president Donald Trump backed out of the agreement following his subsequent election victory. All other signatories agreed to revive the deal the year later and reached a new agreement in 2018.
What is the bloc worth?
The trading bloc’s 11 countries are home to around 500 million people and generate more than 13% of the world’s income. The combined economies of the member states are worth more than £9tn.