The UK’s accession to the Pacific trade deal marks a significant post-Brexit economic move.
- This agreement promises benefits such as tariff-free trade and mutual recognition of qualifications.
- A report suggests modest growth for the UK construction sector from the CPTPP.
- Challenges remain as the sector recovers from Brexit’s economic impact.
- Future expansions of the CPTPP could enhance its benefits for the UK.
Following Brexit, the United Kingdom’s commitment to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) marks a strategic shift in trade relations. With the signing of the accession protocol on 16 July 2023, the UK aims to mitigate the adverse effects Brexit had on its economy by forging new alliances with Pacific Rim countries. The CPTPP, established in 2018, includes nations such as Australia, Japan, and Canada, and boasts a combined GDP of £12 trillion, representing 14 per cent of global GDP.
The CPTPP provides substantial advantages, including tariff-free imports and exports and the recognition of professional qualifications across member states. These elements are anticipated to benefit various sectors, particularly construction, where the UK government predicts gains of over £119 million. Although this figure is merely 0.001 per cent of the sector’s £117 billion GDP, it offers incremental growth and reduced administrative burdens for companies engaging with CPTPP members.
Further growth potential lies in the agreement’s appeal to service providers such as architects and engineers, who will benefit from simplified business travel and extended visa entitlements. The move facilitates a smoother exchange of expertise and resources, fostering a more streamlined operational environment for UK professionals in member states. The emphasis on efficient and predictable customs procedures is poised to enhance trade efficiency, a crucial factor for businesses navigating post-Brexit complexities.
Nevertheless, the CPTPP’s current scope within the Indo-Pacific region is limited, raising questions about the extent of its economic influence. While the region is projected to account for a significant portion of global growth, with half of the world’s middle-class consumers expected by 2035, the agreement presently covers only a segment of this area. This limitation underscores the necessity for broader inclusion to fully leverage the economic possibilities, particularly as the UK continues to explore new trade avenues post-EU exit.
Despite these initiatives, Brexit’s ramifications on the UK construction sector remain unresolved, compounded by the fact that, aside from the CPTPP, only two other trade agreements have been secured post-Brexit. These include accords with Australia and New Zealand. The decline in the EU’s share of UK exports from 50-55 per cent between 1999 and 2007 to 42 per cent in 2022 highlights the urgency for the UK to establish robust trade relationships elsewhere. The potential expansion of the CPTPP could provide a vital boost, offering hope for a more resilient economic future.
The Pacific trade deal represents a pivotal step towards economic recovery and growth for the UK post-Brexit.
