Brexit: UK could join Pacific free trade zone, says Liam Fox
International Trade Secretary Liam Fox has not ruled out the UK joining a multi-nation Pacific free trade zone after Brexit.
Ministers have held informal talks on joining the Trans-Pacific Partnership, according to the Financial Times.
Britain would be the first member of the trade agreement to not border the Pacific Ocean or the South China Sea.
Mr Fox said the UK wanted to see how the TPP evolved after America’s exit from it before making such a move.
In the run-up to Brexit on 29 March 2019, he said his priority was to ensure that the UK continued to derive the full benefits from existing EU trade agreements – and then to work on developing bilateral trade agreements with key partners such as Australia, New Zealand and the US.
The Trans-Pacific Partnership’s 11 members are Australia, Mexico, Singapore, Canada, Chile, Japan, Singapore, Brunei, Peru, Vietnam and Malaysia.
When the agreement was first signed in 2016, it contained measures to lower both non-tariff and tariff barriers to trade and to establish mechanisms to settle disputes between investors from the countries concerned.
But it suffered a serious blow after US President Donald Trump withdrew the US from the agreement last year, reversing the policy of his predecessor Barack Obama.
The treaty is currently being renegotiated under the new title of Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which will require the ratification of its remaining signatories.
Mr Fox, who is on a visit to China, suggested the press reports were “rather overblown” as it was not clear what the reconstituted TPP would “look like”.
“It is not full negotiated yet so we will want to see what emerges,” he said.
“But, on the other hand, we would be foolish to rule anything out. We know that Asia-Pacific will be a very important market and we know a lot of the global growth in the future will come from there.”
Citing forecasts by bodies such as the IMF and OECD that 90% of global growth in trade will come from beyond Europe, he said “we have to look to see where those markets will be”.
“We need to look to these big growing international markets. That’s where we need to grow our trade and investment because that is what will produce our income as a country in the future.”
The 11 TPP signatories accounted for less than 8% of UK exports last year, according to research by the Observatory of Economic Complexity at the Massachusetts Institute of Technology.
Germany, alone, makes up 11%.
Trade Minister Greg Hands told the Financial Times there was no geographical restriction on Britain joining apparently far-flung trade groups.
“Nothing is excluded in all of this,” he said. “With these kind of plurilateral relationships, there doesn’t have to be any geographical restriction.”
In one of his first executive orders after he became president a year ago, Donald Trump authorised America’s withdrawal from the TPP.
Although TPP was never ratified by the US Congress, Mr Trump blamed it and other international trade agreements like Nafta for destroying US jobs and industries by outsourcing them to low-cost competitors.
His predecessor Barack Obama had conversely argued that US membership of agreements like TPP would provide an effective counterweight to Chinese influence in the region.