Last weekend the Business and Trade Secretary, Kemi Badenoch, announced the UK would join the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership). This would grant the UK better trade access to 11 different nations including Japan and Canada, which boast a combined population of 500 million and account for 13 per cent of global GDP. Despite this being the largest trade agreement since Brexit, there are questions over what contribution it will make to the UK economy.
Badenoch’s critics focus on one figure in particular: 0.08 per cent, the predicted percentage increase by which the deal will grow the UK’s GDP. A poor increase indeed, and useful ammunition for Labour’s shadow attorney general, Emily Thornberry, who described the figure as “alarmingly small” especially considering “the jobs we are putting at risk”.
But where did the figure come from? Currently treated as gospel in the media, it first occurred in an obscure passage of a 2021 government report on the UK’s accession to the CPTPP. Though the report estimated a 0.08 per cent increase in GDP, or £1.8bn, it also made clear that these figures were based on “static modelling” and so couldn’t consider the potential of UK exports to “grow by 65 per cent by 2030”. Andrew Neil tweeted that people should be careful with “bandying around” this figure as an attack on the agreement.
Yet there are suggestions that the figure is in fact an overestimate, due to the type of modelling used. It is also worth noting that, while the region is growing fast (Badenoch told Sky News that approximately 50 per cent of global growth will be coming from the Indo-Pacific by 2035), the UK already had bilateral trade agreements with nine of the 11 member states before the deal was made.
While the deal is at least a sign of some tangible post-Brexit progress, it is in no way a replacement in trade terms for EU membership. And with the admittance of big hitters like China “some way off” (in the words of the Australian senator Tim Ayres) the CPTPP starts to look a bit more boast than bargain.
The announcement has an air of window dressing about it, much like the UK’s trade deal with Japan in 2020. Liz Truss, then trade secretary, proudly blew her own trumpet over those negotiations, describing it as an “historic moment”. To be fair, it was the first major post-Brexit trade agreement. It was, however, essentially a rollover from a pre-Brexit agreement the UK had with Japan through the EU. Badenoch’s CPTPP deal is perhaps more impressive as it involves more countries. But what it mostly offers in the short term is the same: bragging rights for the Tories.
And that’s probably the point. The deal is already receiving praise in the press: the Sun has heralded the impending influx of “cheaper booze and chocolate”. With cabinet members forever jostling for position, one may even be forgiven for reading this as Badenoch’s opening gambit for leadership – after all, Truss used trade deals to boost her popularity with the Conservative membership, which eventually put her in No 10. Badenoch would surely have taken note.
[See also: Why MPs are fleeing Westminster]