The UK will become the first European nation to join an Indo-Pacific trade pact in a deal Rishi Sunak has hailed as putting the UK in a “prime position” globally.
The government’s own figures suggest the economic benefits will be dwarfed by the long-term cost of Brexit, however.
No 10 said the deal, which would see the UK join countries including Malaysia, Japan and Australia, would “boost the UK economy by £1.8bn in the long run”.
But last week the official Office for Budget Responsibility confirmed the long-term hit to the economy from Brexit is forecast at 4 per cent of GDP.
The prime minister said the new deal, which would have been impossible while the UK was a member of the European Union, “demonstrates the real economic benefits of our post-Brexit freedoms”.
Membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) tariffs will see tariffs cut on UK exports including food, drink and cars. The pact would also offer new advantages for business and support economic growth across every part of the UK, the government said. Under the plans, for example, dairy farmers will benefit from lower tariffs on exports of products like cheese and butter to Canada, Chile, Japan and Mexico.
Ministers insisted the agreement will protect the NHS and uphold the UK’s high animal welfare and food safety standards.
Mr Sunak said: “We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms. As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation.
“Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies, as the first new nation and first European country to join. British businesses will now enjoy unparalleled access to markets from Europe to the south Pacific.”
Kemi Badenoch, the business and trade secretary, said the deal was “an important moment for the UK”.
Matthew Fell, the interim director general of the CBI, said joining CPTPP was a “real milestone” and that membership “reinforces the UK’s commitment to building partnerships in an increasingly fragmented world.”
Nick Thomas-Symonds, the shadow international trade secretary, described the move as “encouraging”.
“However, as so often with this Conservative government the devil is in the detail. Ministers need to provide answers on vital issues, including on consumer safety, food safety, data protection, and environmental protections,” he said.
“The Conservative government’s track record in striking good trade deals is desperately poor, with their own prime minister and MPs criticising the deal they struck with Australia,” he added.
Naomi Smith, chief executive of campaign group Best for Britain, said: “The irony of this Vote Leave government boasting about joining a new trade bloc will not be lost on the millions of people and thousands of businesses dealing with the fallout of their botched Brexit deal.”
“Contrary to what the prime minister may say, the vast distance involved means this is unlikely to be an economic game-changer. The painful difference is that unlike EU membership, where we worked to raise standards, pressure from CPTPP members is more likely to result in the UK having lower food standards and environmental protections.”
