Pact ‘would cost billions’

BRITAIN will lose billions of pounds if it accepts Japan’s invitation to join an 11-nation Pacific trade pact, experts warn. Japanese prime minister Shinzo Abe yesterday said Britain would be welcomed “with open arms”. But he also insisted the UK would have to quit the EU customs union and be able to set its own tariffs. New deals gained from joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership would fail to make up for lost trade with the EU if we leave the customs union, say the researchers. Peter Levell, of the Institute for Fiscal Studies, said: “We would have to increase exports to current [Pacific] partners by 50 per cent to make up for a 10 per cent reduction in EU exports.”

Dr Thomas Sampson, of the London School of Economics, said: “The Government’s own analysis on the cost of leaving the customs union shows that if the UK leaves the customs union and the single market and signs a free trade agreement with the EU, like Canada, GDP would be 4.8 per cent lower than without Brexit.”

The CPTPP 11-nation trade agreement includes Japan, Canada, Australia and Mexico. US president Donald Trump withdrew from it after entering the White House.

Abe’s comments are likely to be seized on by arch-Brexiteers as the UK would only be able to join the bloc if it was outside the EU customs union.

Trade Secretary Liam Fox said: “Asia-Pacific will be the engine of global growth and joining CPTPP would help us strengthen trade with the region.”

Theresa May’s spokesman said: “Trade between the UK and Japan is already worth £28billion and we are consulting on potential membership.” Oil RSA RBS J Sainsbury SSE Severn Trent Serco Sports Direct Shell Sky Smith & Nephew Smiths WH 565.4 245.8 313.5 1125.5 1824.0 98.3 316.9 2611.5 1725.5 1333.5 2060.0 -10.6 -3.7 -1.6 +6.5 +12.0 -0.9 -8.7 -23.5 -0.5 -18.0 +16.0