LONDON — As Donald Trump and Xi Jinping square off for a tariff war in 2025, Britain is seeking shelter in a growing trade bloc in the Indo-Pacific.
At a minute past midnight on Sunday morning, the U.K. became the first new member to join the tongue-twisting Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since it was formed in 2018.
It’s also the first country that doesn’t at least have a coast fronting the region.
Joining the bloc might not do much to advance Prime Minister Keir Starmer’s growth agenda back home — at least not in the short term.
But as trade rules fragment and two of the U.K.’s largest economic partners prepare to butt heads, it’s the perfect time for the country to join, say trade experts and senior officials from member nations.
The U.K. now gets to shape the future of a 12-member bloc — featuring some of the fastest-growing Asian economies — which globalists see as one of the last places the rules embodied by the beleaguered World Trade Organization remain sacrosanct.
China and Taiwan’s applications to join have loomed large. Yet the U.K. is seen by other members as a reliable bulwark against Beijing, as the deal is upgraded by consensus in the coming years to toughen its approach to state-owned enterprises.
“When the U.K. applied during the first Trump presidency it was already apparent that the international trade order was becoming more fragmented,” said John Alty, a former top civil servant at Britain’s trade department.
That fragmentation has “continued since then, if not accelerated,” Alty said, with Trump insisting he will slap tariffs on U.S. allies and China alike when he sweeps into the White House. Concern is growing global trade “will get even rougher,” Alty added, arguing that joining the bloc “was a good move to make” post-Brexit.
Buccaneering Global Britain
When then-Trade Secretary Liz Truss filed the U.K.’s application to join in early 2021, marking one year since leaving the EU, she promised joining CPTPP would “create enormous opportunities for U.K. businesses that simply weren’t there as part of the EU.”
Under Prime Minister Boris Johnson, the Tories promised to return buccaneering Global Britain to its place at the forefront of global trade which it last occupied in the early 20th century.
The opposition Conservative party still advances this view. Shadow Business Secretary Andrew Griffith said last week that Britain’s entry into CPTPP “along with trade with the U.S., is the path to prosperity, not realignment with the EU.”
But British firms have long scoffed at the hype.
The Department for Business and Trade says the deal will unlock a £2 billion annual boost to U.K. GDP but not until 2040.
A 2021 analysis — produced before the terms of the deal were finalized — predicted a meager 0.08 percent bump to the U.K.’s domestic GDP, mainly because Britain already has trade deals with most of the other members. Meanwhile, the government’s budget watchdog’s modeling consistently shows Brexit will drag U.K. trade down by 15 percent — delivering a 4 percent hit to the U.K.’s economic productivity — in the long term.
With Labour now in power, Starmer has prioritized mending ties with the EU and trade “won’t be driven by post-imperial delusions or political dogma,” said Trade Policy Minister Douglas Alexander last summer.
Yet Labour sees big opportunity in the Indo-Pacific pact.
“We have this twin-track approach to trade,” said a Department for Business and Trade official, granted anonymity to speak freely. That means, they said, securing trade deals with CPTPP and others “at the same time as resetting our relationship with the EU.”
Plan B, CPTPP
It’s a Global Britain outlook minus the anti-EU ideology. Having left the EU and with Trump and China squaring off, Britain can use all the friends it can get.
Over several days in Vancouver late last month, Alexander joined the bloc’s trade ministers from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand Peru, Singapore and Vietnam as they held their annual meeting. He was among those who voted to put China and Taiwan’s controversial applications on the back burner and nominated Costa Rica to be next in line to join.
As the bloc “expands,” Alexander said, “U.K. businesses could gain greater benefits and better access to new markets around the world, contributing to this government’s core mission of driving economic growth across the country.”
Indonesia, with its rapidly growing economy, applied to join in September following bids from Ukraine, Ecuador and Uruguay. Thailand and South Korea are also lining up.
Membership will become more valuable as new nations join, internal government analysis first reported by POLITICO shows. Britain’s agriculture and food sectors will bear the brunt of the downside. Manufacturers and Britain’s powerful services sector, including banks, insurance, and consulting firms stand to benefit most.
The bloc “will grow” opening up new opportunities, insisted Crawford Falconer, the outgoing Whitehall official who devised joining as he architected the U.K.’s post-Brexit trade agenda, during a lecture at the London School of Economics in March 2023. When it comes to the faltering WTO — after Trump crippled its trade dispute court in 2017 — “you’ve got to have a Plan B. And what is Plan B? Well, I mentioned CPTPP,” he said.
New friends, old friends
While the deal’s champions like Falconer and Prime Ministers Boris Johnson, Truss and Rishi Sunak fade from power, there’s a “political consensus” around joining that gives firms “security,” the DBT official said.
Arguments between Britain’s Brexiteers and EU rejoiners that the deal will block the U.K. from getting closer to the EU are a “non-issue,” Alty said.
“Nobody sensible sees this as some sort of alternative to membership of the EU or a sort of replacement for that,” the former official, who now works as a consultant at Pagefield, said. Membership is “a sensible way to strengthen your trading environment and relationships with some important parts of the world,” Alty insisted.
But joining also has the U.K. stepping into a geopolitical balancing act as Starmer works to rekindle relations with China while Trump threatens to clamp down on Beijing. Labour will face pressure from U.K. allies to continue blocking China’s CPTPP bid.
“I do not want to lower the level of qualification requirements for China to join,” said Kunihiko Miyake, a former Japanese diplomat, research director of the Canon Institute for Global Studies and special adviser to Tokyo on foreign policy. “We made a similar mistake when we allowed China to join the WTO.”
This year Canada chaired the Indo-Pacific bloc and led efforts to modernize and tighten its rules, making the bar higher for members with non-market economies like Vietnam and aspirants like China queuing to join.
It was one of the biggest issues Alexander and his new colleagues grappled with in Vancouver, said a senior official from a CPTPP member nation granted anonymity to speak freely. “There’s been a lot of work that’s been done on that,” they said.
In battening the economic hatches against China, Trump and fragmenting global trade, Alty said, “it’s valuable to have genuine coalitions of the willing.”
Emilio Casalicchio contributed to this report.
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