On the 1st, an employee checks customs documents at Larne Port in Antrim County, Northern Ireland. AFP Yonhap News
On the 1st of next month (local time), the UK submits an application for membership in the Comprehensive and Progressive Pacific Rim Economic Partnership Agreement (CPTPP) led by Japan. It is an alternative to make up for the economic losses caused by the withdrawal of the European Union (Brexit), but criticism has already emerged that it is not profitable. Although there is an intent to improve trade relations with the United States, the Joe Biden administration is distracted by domestic economic reconstruction and is not interested in trade agreements right now.
According to British media on the 30th, Prime Minister Boris Johnson formalized membership in the CPTPP, saying in a statement that “one year after leaving the EU, we will build a new partnership that will bring enormous economic benefits to the British.” CPTPP is a free trade agreement revised after former U.S. President Donald Trump withdrew from the Pacific Rim Economic Partnership Agreement (TPP), with its own national priority. When the United States fell out of the TPP, led by the Barack Obama administration, Japan took over the baton and changed it to its current name, which took effect in March 2018.
Currently, 11 countries including Australia, Canada, Japan, Malaysia, and New Zealand belong, and Korea is also seeking to join. The UK will be the first country to join the CPTPP after the agreement enters into force. The total population of the market is 500 million people, with more than 13% of the world’s gross domestic product (GDP).
British Minister of International Trade Leeds Truss is scheduled to discuss with Japan and New Zealand on an official application to join the CPTPP on the 1st of next month. The BBC said, “If the UK joins, the economy will be next to Japan in the size of its member countries.” The British government expects to be exempt from tariffs on 95% of the trade volume between member states by joining the agreement.
However, skepticism is prevalent about the benefits and losses of joining the CPTPP. It means that the EU is not enough to be a substitute for the world’s largest free trade agreement. Even the UK government, in its 2018 report, predicted that even if it concluded free trade agreements with regions outside the EU such as China, India, and Australia, the gross domestic product (GDP) would only rise 0.1 to 0.4% in the long term.
Nevertheless, the reason Britain is motivated by the new agreement is because it has the United States in mind. The British Daily Financial Times (FT) said, “Prime Minister Johnson hopes that US President Biden will also join the CPTPP and open the’back door’ to seal trade relations between the two countries.” In fact, with the inauguration of the Biden administration, the possibility of a return to the CPTPP was revealed.
However, for the time being, it is highly likely that Prime Minister Johnson will only use Kimchi-guk. This is because President Biden has prioritized the recovery of his country’s economy, which has suffered from the novel coronavirus infection (Corona 19), rather than signing a new trade agreement. An official from the US administration also confirmed to FT that “we are focusing on domestic investment and economic growth that can support the US middle class.”
Some point out that it is contradictory for the UK to sign up for a new agreement as it ended free trade with the EU. The BBC pointed out that “CPTPP (affiliated) countries account for less than 10% of UK exports, which is part of the deal with the EU.”
Heo Gyeongju reporter [email protected]
News directly edited by the Hankook Ilbo can also be viewed on Naver.
