Context: Recently, Britain has decided to join Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

About the Agreement

• Comprehensive and Progressive Agreement for Trans-Pacific Partnership is an 11-nation Indo-Pacific free-trade bloc.

• Its members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

• Britain will be the first new member since the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was created in 2018, and the first European country in the bloc.

• The bloc, which is home to 500 million people, will be worth 15% of global GDP once the UK joins.

• The agreement between the UK and trans-pacific countries will now need to be ratified by Westminster and each of the CPTPP countries.

• The British government said the deal would mean that more than 99% of British exports — including for key markets such as cheese, cars, chocolate, machinery, gin and whisky — would have zero tariffs.

Importance for UK

• Boost to GDP: It also claimed that the deal would add GDP 1.8 billion ($2.2 billion) annually to the U.K. economy in the long run. This, however, translates to a modest boost of 0.08% to GDP.

• Post Brexit Freedom: Prime Minister Rishi Sunak describing the outcome as an example of “post-Brexit freedoms”, which will help Britain’s economy.

• Gateway to Indo-pacific: The government said the deal was a “gateway” to the Indo-Pacific region which would account for a majority (54%) of global economic growth in the future.

• Benefits to companies: Once Britain becomes a member of the bloc, U.K. firms will not need to establish a local office or be resident to provide services and will be able to operate on a par with firms in host countries, the government said.

What’s good about TPP?

• New economic growth: Those in favour say this trade deal will unleash new economic growth among countries involved.

• Improve people’s living standards: It is being said that the TPP has high potential to improve people’s living standards by facilitating the free cross-border movement of key factors of economic activity, such as goods, people, money, and information.

• Failure to bring the TPP into force would be a great loss to not only the TPP countries such as Japan and the US but also the global economy.