The U.S. may have worked its way out of the Trans-Pacific Partnership, but the U.K. seems to be working its way in.
The U.K. has reportedly had informal talks about joining the Pacific Rim trade deal that the 11 remaining member nations have been trying to resuscitate since the U.S. departure last January. The move, if made, would happen in line with Brexit’s end and would make Britain the first member nation that doesn’t border the Pacific Ocean or the South China Sea.
If the U.K. were to become a part of the TPP, it might stand to breathe new life into the agreement that some nations grew less keen on without the U.S. involved. As it stands, the 11 remaining TPP countries, which include Canada, Japan and Mexico, have agreed to push forward with a TPP now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In November, ministers from the 11 member nations agreed to a framework for the deal and said they’d come to terms on the substance of the agreement but still had work to do on the details.
The likelihood of the U.K. joining TPP still rests on a number of things, like how the current iteration of CPTPP turns out and what happens in the Brexit separation.
Skeptics are already calling the idea of a U.K.-included TPP “desperate” on the U.K.’s part, as its entry into TPP would neither give it much control in the Pacific Rim region, nor much of a trade benefit as its trade in goods with the region has been on the light side.
The U.K. exported just 1.6% of its goods to Japan in 2016, according to data compiled by the Observatory of Economic Complexity—and Japan is the largest economy in the TPP. Canada only took in 1.5% of the U.K.’s exports. By comparison, the U.K. exported 17.5% of its goods to Germany and France alone, which is why leaders and stakeholders have aired concerns that the U.K.’s priority should be on working out its post-Brexit trade relationship with the EU.
“This smacks of desperation,” U.K. former Lib Dem leader Tim Farron told The Financial Times. “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 the sky thinking.”
The news of the U.K. mulling a TPP membership follows a report from the British Retail Consortium released late last month warning that the U.K. brands and retailers could soon be spending more on sourcing without the duty savings they’re currently enjoying under EU trade deals if they don’t adopt their own new trade deals in short order.
[Read more from the report: Clothing Prices Could Soar if UK Doesn’t Adopt New Trade Deals]
Currently, the EU doesn’t pay any tariffs for clothing imports from Turkey for one, which is one of its biggest trading partners in the sector, and once the U.K.’s on its own without a trade deal, the tariff rate would be 12 percent. That would make a $5 T-shirt cost $5.60, which could very quickly add up to considerable extra production costs.