Britain has reached an agreement to join a major trans-Pacific partnership, calling it its biggest trade deal since Brexit.
The country will become the first new member, and the first in Europe, to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since it came into force in 2018.
British Prime Minister Rishi Sunak announced the move early Friday, hailing it as a historic move that could help lift economic growth in the country by £1.8 billion ($2.2 billion) in the long run.
“The bloc is home to more 500 million people and will be worth 15% of global GDP once the UK joins,” Sunak’s office said.
The CPTPP is a free trade agreement with 11 members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. It succeeded the Trans-Pacific Partnership after the United States withdrew under former President Donald Trump in 2017.
The UK agreement comes almost two years after it began talks to join the pact.
As a member, more than 99% of UK exports to those 11 countries will now be eligible for tariff-free trade. That includes major exports, such as cheese, cars, chocolate, machinery, gin and whisky.
In the year through September 2022, the United Kingdom exported £60.5 billion ($75 billion) worth of goods to CPTPP countries, Sunak’s office said in a statement.
Dairy farmers, for example, sent £23.9 million ($29.6 million) worth of products such as cheese and butter to Canada, Chile, Japan and Mexico last year, and were set to “benefit from lower tariffs,” it added.
The deal also aims to lift red tape for British businesses, which will no longer be required to set up local offices or be residents of the pact’s member countries to provide services there.
Services made up a huge chunk — 43% — of overall UK trade with CPTPP members last year, according to Sunak’s office.
“We are at our heart an open and free-trading nation,” the prime minister said in the statement, seeking to cast the deal as an example of the “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,” Sunak added.
Several businesses expressed their support for the deal in the government statement, including global bank Standard Chartered
(SCBFF) and spirits maker Pernod Ricard
Joining the pact “is a big opportunity for our Scotch whisky business,” said Anishka Jelicich, Pernod Ricard’s UK director of public affairs.
“Five of our top 20 export markets are CPTPP members. We expect tariff cuts and smoother access to some of the world’s fastest growing economies to increase exports and secure jobs and investment in the UK, with sales doubling in some markets.”