UK-TPP link is not an effective formula
With still more than a year to go until Britain’s formal divorce from the European Union, it is already wooing a new partner on the other side of the world. The Conservative government’s International Trade Minister Liam Fox, an ardent supporter of the United Kingdom’s breakup with the EU, has said he does not rule out a relationship with the 11-nation Trans-Pacific Partnership.
Previous reports that Britain had already held talks about joining the TPP were criticized by Brexit skeptics, who said the government should focus on defining future arrangements with the EU rather than on a fantasy future of linking up with countries of the Pacific Rim.
“This smacks of desperation”, the Financial Times quoted former Liberal Democrats leader Tim Farron as saying. “These people want us to leave a market on our doorstep and join a different, smaller one on the other side of the world. It’s all pie in sky thinking.”
On top of the geographically challenging concept of a North Atlantic nation joining a group of distant partners that all border the Pacific, there is the additional problem that the terms of the TPP have yet to be finalized.
The idea of a trade link between Pacific countries was largely an initiative of former US president Barack Obama, and widely viewed as a US attempt to provide a counterweight to China’s rising economic power in the Asia-Pacific.
However, one of US President Donald Trump’s first acts as Obama’s successor was to pull out of the TPP agreement, a move linked to his protectionist “America First” strategy. Despite this blow, the US’ erstwhile Pacific partners hung together, announcing a draft agreement in November ahead of a hoped-for final deal in the next few months.
So where does Britain fit in? From London’s perspective, the attractions are obvious. As the government of British Prime Minister Theresa May scrambles for new markets to fulfill Brexit’s promise of creating a more global Britain, the prospect of a TPP connection provides at least some positive headlines.
But the remaining TPP partners, effectively led by Japan after the departure of the United States, may wonder what is in it for them. Britain currently ships just 7.5 percent of its physical exports to the existing TPP member states, compared with the almost 50 percent that goes to its 27 partners in the EU. Britain’s trade with neighboring Ireland is twice the size of its trade with Japan.
That means Britain would not give the existing TPP member states much incentive to make concessions to get it on board.
Beijing might also look askance at an outside power muscling into the Asia-Pacific arena. That could deter other Asian countries from putting out the welcome mat for Britain, which incidentally is barred from undertaking nuts-and-bolts talks on new trade deals until it finalizes its future relationship with the EU. So Fox’s role is basically limited to touring foreign capitals to explore future possibilities.
His TPP comments came during one such visit to China, a country with which he said Britain also wanted to enhance its trade and investment relationship. Fox said Britain would explore all possibilities in relation to the TPP, telling an interviewer: “We would be foolish not to look at all the potential.”
As a leading promoter of Brexit, Fox is pushing a global free trade agenda which he thinks will boost Britain’s prospects outside Europe. “The tectonic plates of the world economy are shifting,” Fox wrote in November. “With an independent trade policy, Britain can put itself in a strong position to benefit, opening up access to fast-growing markets across the world.”
He said his department has established contacts with 21 countries, from the US and Japan to India and Australia, to explore the best ways to boost trade and investment ties.
It is stirring stuff, guaranteed to inspire the pro-Brexit camp. But it is another matter whether the countries of the TPP will see closer ties with Britain as a priority for them.