CPTPP: UK accepted into Indo-Pacific trade bloc in biggest trade deal since Brexit
The UK has been accepted into an Indo-Pacific trade bloc in what the government says is its biggest trade deal since Brexit.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between 11 countries across the Indo-Pacific, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – and now the UK.
The partnership sees the countries open up their markets to one another, reducing trade barriers and tariffs, with the hope of bolstering the economies of its members.
Sunak hails UK joining CPTPP – live politics updates
Trade Secretary Kemi Badenoch said the UK’s accession to the CPTPP was formally confirmed in a telephone call between her and counterparts from the group at 1am BST on Friday.
The UK is the first European country to enter the agreement, and the government claims it will lead to a £1.8bn boost to the economy “in the long run”.
Prime Minister Rishi Sunak said the deal shows “what we can achieve when we unleash the benefits of Brexit”.
While the UK already has trade agreements with most of the CPTPP members, apart from Malaysia, UK officials said it would deepen existing arrangements, with 99% of UK goods exported to the bloc now eligible for zero tariffs.
This includes cheese, cars, chocolate, machinery, gin and whisky, while Downing Street said the services industry would also enjoy “reduced red tape and greater access to growing Pacific markets”.
The deal has been praised by a number of business groups, including the Confederation of British Industry (CBI), Standard Chartered bank and the world’s second-largest wine and spirits seller Pernod Ricard.
But other trade experts have warned it will not make up for the economic hit caused by leaving the European Union.
Chancellor Jeremy Hunt said joining the CPTPP is a “massive opportunity” for British exporters and shows “our influence in this part of the world is becoming more significant”.
Ms Badenoch told Sky News the difference between being part of the CPTPP and the EU is “we make the rules and regulations on our standards”.
She promised the deal is “not going to displace farmers in the UK” and said it will provide more competition for EU countries so “people don’t have to buy what they don’t want”.
Ms Badenoch admitted the lower tariffs will apply to palm oil, which is responsible for destroying orangutan habitats, but said you “have to make trade-offs” when doing a deal and said the UK currently buys 1% of Malaysia’s exports and “moving to 2% from 1% is not what is going to cause deforestation.”
She claimed the UK will have “more influence” on sustainability as part of the bloc – despite Greenpeace calling the deal “outrageous”.
“Palm oil is actually a great product, it’s in so many of the things we use,” she added.
“This is not some illegal substance we’re talking about and actually there are other crops in the EU that are causing deforestation that fit within EU rules.”
The UK began negotiations to join the bloc in September 2021 when Boris Johnson was in Downing Street.
The signatory countries of the CPTPP are home to 500 million people and the government claims the deal will be worth £11 trillion in GDP, accounting for 15% of global GDP.
However, critics said the impact will be limited, with official estimates suggesting it will add just £1.8bn a year to the UK economy after 10 years, representing less than 1% of UK GDP.
Mr Sunak said the agreement “puts the UK at the centre of a dynamic and growing group of Pacific economies”.
“We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms,” he added.
“As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation.”
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‘Real milestone for British industry’
The announcement was welcomed by business group the CBI which called it “a real milestone for the UK and for British industry”.
Interim general director Matthew Fell said: “Not only does the agreement provide greater access to a group of fast growth economies representing 14% of global GDP and over 500 million consumers, but membership reinforces the UK’s commitment to building partnerships in an increasingly fragmented world.
“CPTPP countries and business need to work together to future-proof the rules-based trading system and stimulate growth with a focus on digital, services and resilient supply chains.”
Labour said the agreement represented “encouraging” progress but it needed to see details.
The party’s shadow trade secretary Nick Thomas-Symonds said: “The Conservative government’s track record in striking good trade deals is desperately poor.
“Other countries joining CPTPP arrangements have secured important safeguards and put in place support for their producers: it is vital that ministers set out if they plan to do the same.”
Singapore is one of the now-12 members of the CPTPP
‘EU should be priority’
The Institute of Directors said it was “vital the UK signs trade deals to restore our international reputation since Brexit”.
But it added “complete reorientation” to the Indo-Pacific would not solve “the very real problem that businesses currently face – namely that they have many more trade related challenges than they did six years ago”.
“From our surveys, directors have told us that the EU-UK relationship is a priority issue the government needs to address in order to support business,” they said.
“UK companies still rely on the long-established links they have with EU markets, which are directly on our doorstep and with whom they have closer historical ties.
“The Indo-Pacific strategy will open up important opportunities for UK businesses, but the government must not forfeit the significance of our relationship with the EU in order to do so.”
Outgoing US President Joe Biden is set to meet his Chinese counterpart Xi Jinping today for what is likely to be his last time as US president.
The two leaders are expected to hold talks on the sidelines of a meeting of Asia-Pacific leaders in the Peruvian capital, Lima.
It comes against the backdrop of increasing tension in the US-China relationship with a potential trade war looming under a Trump presidency, several China hawks tapped for US cabinet positions and China’s growing status among global south countries as an emerging leader of an alternative world order.
This week China was focused on events in the southern city of Zhuhai.
First there was a car ramming attack at Zhuhai’s sports stadium which left 25 people dead. A shocking event that was heavily censored in China.
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What happened at Zhuhai sports centre?
Less than an hour’s drive away the country was holding its premier air show.
It was a military enthusiast’s dream, and not even intermittent rain could keep the crowds of tens of thousands of people away from relishing in the roar of jets in the skies above Zhuhai.
China’s fighter jet fleet
One of the main drawcards was China’s newest stealth fighter the J-35A. It will join the country’s J-20 in service for the People’s Liberation Army Air Force (PLAAF).
A J-35A stealth aircraft flies during the exhibition. Pic: Reuters
The J-10C was China’s aerobatics star of the show. There were daily displays of its prowess in sky-high manoeuvres and formations that impressed onlookers, leaving a streak of colours across the cloudy rain-clogged sky.
China’s aerobatic team
China’s military modernsiation programme is continuing apace
It boasts the largest navy in the world and the largest armed forces by active-duty personnel.
The People’s Liberation Army (PLA) Airforce is developing fast too.
Dr Nicole Leveringhaus, a China security expert from King’s College London, says: “China started with very little. It was devastated by wars on many fronts in the 30s and 40s. Its defence industry was depleted. In 70-plus years it’s built itself up and now we’re seeing the results.
“It’s an impressive feat to go from a bloated land-based peasant guerrilla army to what it has to today.”
Chinese pride and nationalism on display
Enjoying the air show spectacle, military fan Liu Liansong said: “I think the air show is great. It is a firm manifestation of the air force’s development from scratch. We as Chinese people feel very proud.”
Inside the air show
The air show included massive exhibition halls of military hardware, from drones to robotics, firearms and mock missiles. Merely getting from one end of the venue to the other through densely packed crowds was a mission.
Russia in the air
The other crowd puller this week was Russia’s aerobatic air force unit, performing daily theatrics at dizzying speeds.
It is another sign of the deepening ties between China and Russia.
Russia’s aerobatic team shows off for the crowd
One Russian tourist and recreational pilot, Yulia, told Sky News: “Both sides are looking for good communication in business, aviation and in many spheres including tourism.”
The secretary of Russia’s security council and former defence minister Sergei Shoigu also visited the air show, viewing both Chinese and Russian-made jets.
In Beijing, secretary Shoigu was quoted by Russian state media as saying: “I see the most important task as countering the policy of ‘dual containment’ of Russia and China pursued by the United States and its satellites.”
One of Russia’s jets up close
The West is increasingly frustrated by China’s support of Russia. The US has sanctioned two Chinese companies, accusing them of being involved in the production of Russian aerial drones used on the battlefield.
China insists it is not supplying weapons to Russia.
One of the companies, Xiamen Limbach Aircraft Engine Co, had a small stand in one of the exhibition halls. Its representatives declined Sky News’ request for an interview.
Tariff war brewing
Despite the raw military might on display in Zhuhai, in China there is uncertainty and unease about what an impending Donald Trump presidency will mean for global trade.
President-elect Trump has threatened blanket tariffs of up to 60% on Chinese products exported to the US.
This would be a serious blow to China’s target GDP growth and comes at a time when the country’s economy faces deep-set challenges.
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At the other end of the country, in Beijing analysts are weighing up the impact of possible tariffs and the Chinese government’s options to respond.
Senior Asia analyst Chim Lee, from The Economist Intelligence Unit, is not optimistic that a US-China agreement to minimise the damage can be reached.
Senior Asia analyst Chim Lee
“I think both sides have recognised that the era of making deals is passed,” Mr Lee said.
“We’re going to see China starting with some targeted measures, tariffs it feels more comfortable to impose,” he explained. “But there are also areas where China is starting to be a bit more aggressive.”
This action could include export controls on China’s production of critical minerals and retaliatory tariffs on US agriculture exports.
Trade competition, military posturing and complicated geo-political alliances have set the stage for a challenging next phase in US-China relations.
New pictures show the moment of impact as an Israeli missile hit a Beirut apartment block and exploded.
The block was one of five buildings destroyed by airstrikes on Friday alone.
Israel launched airstrikes in the southern suburbs of Beirut in a fourth consecutive day of intense attacks.
There were no immediate reports of casualties.
An Associated Press photographer captured a sequence of images showing an Israeli bomb approaching and hitting a multi-storey apartment building in Beirut’s Tayouneh area.
Richard Weir, a senior crisis, conflict and arms researcher at Human Rights Watch, reviewed the close-up photos to determine what type of weapon was used.
“The bomb and components visible in the photographs, including the strake, wire harness cover, and tail fin section, are consistent with a Mk-84 series 2,000-pound class general purpose bomb equipped with Boeing’s joint directed attack munition tail kit,” he told AP.
Pics: AP
Smoke covers a building that collapses following the strike. Pic: AP
Deadly strikes as bombardment stepped up
Israel stepped up its bombardment this week – an escalation that has coincided with signs of movement in US-led diplomacy towards a ceasefire.
The Israeli military said its fighter jets attacked munitions warehouses, a headquarters and other Hezbollah infrastructure. It issued a warning on social media identifying buildings ahead of the strikes.
Meanwhile, an Israeli airstrike killed five members of the same family in a home in Ain Qana in the southern province of Nabatiyeh, Lebanon’s state media said.
The report said a mother, father and their three children were killed but didn’t provide their ages.
Keep up with all the latest news from the UK and around the world by following Sky News
Three other Israeli strikes killed six people and wounded 32 in different parts of Tyre province on Friday, also in south Lebanon, the report said.
Video footage also showed a building being struck and turning into a cloud of rubble and debris that billowed into Horsh Beirut, the city’s main park.
Residents check the site of the airstrike in Tayouneh, Beirut. Pic: AP
More than 3,200 people have been killed in Lebanon during 13 months of fighting between Israel and Hezbollah – most of them since mid-September.
About 27% of those killed were women and children, according to Lebanon’s health ministry.
Israel dramatically escalated its bombardment of Lebanon from September, vowing to cripple Hezbollah and end its barrages in Israel.
Friday’s strikes come as Lebanon’s caretaker prime minister has asked Iran to help secure a ceasefire in the war between Israel and Hezbollah.
The prime minister appeared to urge Ali Larijani, a top adviser to Iran’s supreme leader, Ali Khamenei, to convince the militant group to agree to a deal that could require it to pull back from the Israel-Lebanon border.
Iran is a main backer of Hezbollah and for decades has been funding and arming the Lebanese militant group.
On Thursday, Eli Cohen, Israel’s energy minister and a member of its security cabinet, said that prospects for a ceasefire with Lebanon were the most promising since the conflict began.
The Washington Post reported Israel’s Prime Minister Benjamin Netanyahu was rushing to advance a Lebanon ceasefire to deliver an early foreign policy win to his ally, US President-elect Donald Trump.
“Super high-IQ revolutionaries” who are willing to work 80+ hours a week are being urged to join Elon Musk’s new cost-cutting department in Donald Trump’s incoming US government.
The X and Tesla owner will co-lead the Department Of Government Efficiency (DOGE) with former Republican presidential candidate Vivek Ramaswamy.
And in a post on X, the official DOGE account put out a call to arms for people to sign up and help “dismantle government bureaucracy”.
The post said: “We are very grateful to the thousands of Americans who have expressed interest in helping us at DOGE.
“We don’t need more part-time idea generators.
“We need super high-IQ small-government revolutionaries willing to work 80+ hours per week on unglamorous cost-cutting.
“If that’s you, DM this account with your CV. Elon & Vivek will review the top 1% of applicants.”
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Elon Musk speaking at an event held at Donald Trump’s Mar-a-Lago estate. Pic: AP Photo/Alex Brandon
In a reply to an interested party, Mr Musk suggested the lucky applicants would be working for free.
“Indeed, this will be tedious work, make lost of enemies & compensation is zero,” the world’s richest man wrote.
“What a great deal!”
When announcing the new department, President-elect Donald Trump said Mr Musk and Mr Ramaswamy “will pave the way for my administration to dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies”.
Mr Musk has previously made clear his desire to see cuts to “government waste” and in a post on his X platform suggested he could axe as many as three-quarters of the more than 400 federal departments in the US, writing: “99 is enough.”
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