UK Pursues Global Trade Deals, Excludes EU Membership

The UK government, under Business Secretary Jonathan Reynolds, is adopting a dual approach to trade policy, aiming to strengthen ties with the European Union while simultaneously pursuing global partnerships. The imminent entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is viewed as a significant opportunity for British exporters, despite the fact that rejoining the EU would necessitate leaving this trade bloc. The CPTPP includes countries such as Australia, Canada, and Japan, and is projected to have a combined GDP exceeding £12 trillion. Despite the enthusiasm surrounding the CPTPP, economists caution that its impact on the UK’s trade and GDP will be minimal in the short to medium term. The Office for Budget Responsibility has indicated that the CPTPP could contribute only 0.04% to GDP over a long-term period of 15 years. Additionally, previous bilateral agreements with Australia and New Zealand are expected to yield a mere 0.1% increase in GDP by 2035. Reynolds emphasizes the importance of the EU as the UK’s largest trading partner, acknowledging the challenges faced by British businesses in exporting to Europe due to bureaucratic hurdles. The Labour government aims to rectify this by negotiating the removal of unnecessary border checks and establishing mutual recognition for professional qualifications, facilitating easier operations for UK firms in key European markets. This strategic shift reflects a broader commitment to enhancing the UK’s global trade relationships while recognizing the significance of the EU, ultimately seeking to balance domestic economic interests with international trade ambitions.