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UK to join trans-Pacific trade bloc

The UK has struck a deal to join an 11-country trans-Pacific trade bloc, as it looks to deepen ties in the region and boost its economy. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) includes Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The deal to join, which the UK government says is its biggest trade agreement since Brexit, follows two years of negotiations by the Department for Business and Trade. The UK – which will be the first new member since CPTPP was created and the first European member – will bring the combined GDP of the trade bloc to £11 trillion (about 15% of the global total). According to the UK government, the bloc – home to more than 500 million people – could boost the UK economy by £1.8 billion a year in the long run. More than 99% of UK goods exports to CPTPP countries will now be eligible for zero tariffs, including products such as cheese, chocolate, machinery, gin and whisky. However, the economic gains of joining the bloc are generally assessed to be modest. The country already has free-trade deals with nine of CPTPP's 11 members, and the government itself estimated that the deal would add just 0.08% to GDP in the long term. In this context, strategic and diplomatic motivations are of considerable importance. Prime Minister Rishi Sunak previously said that China poses an "epoch-defining challenge" to the world order, and the deal is also about increasing the UK's influence in a region increasingly dominated by the East Asian economic powerhouse. Nonetheless, the government emphasised the benefits for trade. 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.” He added: “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.” Sunak said that the agreement will protect the UK’s vital industries and entities, including agriculture and the NHS (National Health Service). Dairy farmers can expect to benefit from lower tariffs on exports of products like cheese and butter to Canada, Chile, Japan and Mexico. Business and Trade Secretary, Kemi Badenoch, said: “This is an important moment for the UK. Our accession to CPTPP sends a powerful signal that the UK is open for business and using our post-Brexit freedoms to reach out to new markets around the world and grow our economy.” Badenoch continued: “Joining CPTPP will support jobs and create opportunities for companies of all sizes and in all parts of the UK. It is about giving British businesses improved access to the countries that will be a gateway to the wider Indo-Pacific region, which is projected to make up the majority of global growth in the future.”

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