From MoneyWeek · · 2m
Britain picked the Pacific, then hesitated
Full CPTPP access finally landed, and the government is already talking up a trade reset that would undo it.
In brief
Full CPTPP access finally landed, and the government is already talking up a trade reset that would undo it. Britain cannot sit in the EU customs union and the CPTPP at once, and the dithering is costing exporters the confidence to commit either way. Originally reported by MoneyWeek.
A big trade win, ignored
Canada's ratification gave Britain full CPTPP access last week. It is the largest trade deal since leaving the EU, and it barely registered against gilt turmoil and a stalling economy.
What Britain just joined
The bloc spans 12 countries across Asia and the Americas, including Japan, Canada, Mexico, Australia and Malaysia. It went fully live on 1 September, opening 600 million consumers tariff-free.
Two billion, or much more
The Treasury puts the boost at around £2 billion. That figure assumes a static market, and the Pacific is anything but static.
“The Treasury estimates the deal could deliver a £2 billion boost to the economy.”
The reset cancels the deal
Ministers are pushing to rejoin the customs union. That hands Brussels control of British tariffs, including on Pacific imports, which means walking out of the CPTPP.
“The two trade deals are incompatible.”
Europe is shrinking
The EU made up 25% of global output at the start of the century and is down to 15% now. The CPTPP trails it by only £4 trillion in GDP and should pass it within a decade.
Standards, not superstate
CPTPP members recognise each other's rules, so a product cleared in Japan can sell in Mexico or Australia. No flag, no anthem, no freedom of movement, just tariff-free trade.
“akin to what the EU was back when it was just the Common Market”
Growth is where deals happen
Italy, France and Germany are stuck at zero growth, so nothing is being built and nobody is buying. Order books are far easier to fill in Australia, Chile or Malaysia than in Portugal or Greece.
Pick a side already
While the prime minister keeps floating a reset, firms have no reason to invest in Pacific markets they might lose. The government should name the CPTPP as Britain's main bloc and stop there.
Who is arguing this
Matthew Lynn writes for Bloomberg and MoneyWeek, with syndication from the Telegraph to the South China Morning Post. This ran first in MoneyWeek's magazine.
The takeaway
Britain cannot sit in the EU customs union and the CPTPP at once, and the dithering is costing exporters the confidence to commit either way.
