Britain is making known its hopes to one day join the Trans-Pacific Partnership or TPP, a free trade agreement currently being negotiated by eleven countries bordering the Pacific and the South China Sea.
The British government hopes trade with fast-growing economies will make up for losses that may occur after it leaves the European Union as scheduled in 2019.
On a recent trip to China, Britain Trade Minister Liam Fox tentatively suggested his country could one day join the TPP.
“We don’t know what the success of the TPP is going to yet look like, because it isn’t yet negotiated. So, it would be a little bit premature for us to be wanting to sign up to something that we’re not sure what the final details will look like. However, we have said that we want to be an open, outward-looking country, and therefore it would be foolish for us to rule out any particular outcomes for the future,” Fox told reporters during the trip last week.
London sits some 7,000 kilometers from any Pacific coastline. So, does geography no longer matter in 21st century trade? Not so, said Jonathan Portes, an economist and professor at Kings College London.
“There has been an argument put forward that particularly as trade in services expands, and as a result of technology, it will matter considerably less in the future, and that seems to make a lot of sense. However, unfortunately, so far at least, the actual data and evidence don’t really support this contention. For whatever reason, geography at the moment seems to matter as much as it ever did,” he said.
By leaving the European Union’s Single Market and Customs Union on its doorstep, Britain will abandon a free trade agreement that accounts for about half of its global trade. In contrast, all eleven countries currently negotiating the TPP combined accounted for less than 8 percent of British goods exported last year.
Portes said it will take decades for other trade deals to make up ground.
“Our companies are in many cases very closely integrated with the European Union, meaning that there will be substantial disruption as a result of the likely implications of Brexit.”
The countries negotiating the TPP include Chile, Australia, Brunei, Canada, Japan, Mexico, New Zealand, Malaysia, Peru, Singapore and Vietnam.
During his tenure, U.S. President Barack Obama was a driving force behind TPP, but his successor, Donald Trump, pulled the United States out of the deal, claiming it would be bad for America. Negotiations between the eleven remaining countries are progressing slowly.
“The TPP, already as a consequence of the U.S. withdrawal, has its own internal problems. And they’re going to have to work out how to get that back on track,” said Portes.
But Britain’s interest in the TPP has been welcomed by some of the parties involved, particularly Australia.
Meanwhile, British Prime Minister Theresa May is expected to visit Asia later this year in an attempt to boost ties ahead of Brexit.