The UK has held informal talks about joining a flagship Pacific trade group, in an audacious bid to kick-start exports after Brexit.
The proposal, being developed by Liam Fox's Department for International Trade, would make the UK the first member of the Trans-Pacific Partnership that does not border the Pacific Ocean or the South China Sea.
It would help to reinvigorate TPP, a key initiative of Barack Obama's administration that appeared fatally wounded when Donald Trump withdrew the US last January.
The 11 remaining members, including Australia, Japan and Mexico, agreed in November to continue with a successor deal, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
The UK discussions to join the distant trade group that has lost its biggest member come as Mr Fox embarks on a three-day trip to try and woo Chinese business.
Greg Hands, a UK trade minister, said there was no geographical restriction on Britain joining TPP. "Nothing is excluded in all of this," he told the Financial Times. "With these kind of plurilateral relationships, there doesn't have to be any geographical restriction."
However, UK accession would almost certainly have to wait until TPP itself has been revised, and the UK has agreed its post-Brexit relationship with the EU.
The UK’s trade relationship with TPP countries pales in comparison to its existing one with fellow EU members or the US.
Japan
Japan, by far the largest economy in the TPP, accounted for just 1.6 per cent of the UK’s goods exports in 2016, according to MIT’s Observatory of Economic Complexity, which compiles global trade data.
All 11 TPP countries combined accounted for less than 8 per cent of UK goods exported last year while in comparison Germany alone accounted for 11 per cent.
The same applies to UK exports of financial and other services. In the first half of last year the UK exported almost £1.7 billion (€1.9 billion) in services to Japan — about a tenth of the £16.6 billion that the UK service industries exported to the US.
Officials from TPP countries say they expect to sign the revised deal early in 2018 but are now trying to resolve some issues raised by Canada. One said it was “way too soon” to discuss UK accession before a Brexit deal.
When the TPP was initially concluded in 2015, it was envisaged as a "platform for regional economic integration" rather than a group that could incorporate European members. However, some TPP countries now welcome the idea of having another G7 economy as a member. British officials have floated the idea in meetings with counterparts from Australia, New Zealand and other TPP countries in recent months.
Labour criticised the government's interest in TPP, saying that it should focus closer to home, in particular on Britain's "key future trading arrangement" with the EU. "Of course [TPP] could be helpful but it is not the main event, and at the moment the government is making a hash of that," said Barry Gardiner, the shadow trade secretary.
Desperation
"This smacks of desperation," said Tim Farron, former Lib Dem leader. "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."
Legally, the UK cannot sign trade deals before it leaves the EU, scheduled for March 2019. Joining TPP could be a less protracted process than negotiating individual trade deals with the member countries, but the trade department could decide to pursue bilateral deals instead. Much of its work is focused on attracting direct investment to the UK.
TPP would cut tariffs on a range of goods, including agricultural products, and services. It was designed to increase American influence in Asia, but both Mr Trump and his former adversary Hillary Clinton criticised the deal for its potential impact on blue-collar jobs.
The UK cabinet has yet to discuss Britain's potential membership of TPP. Michael Gove, the environment secretary, said in December that Parliament would have an effective veto over any trade deal.
– Copyright The Financial Times Limited 2018
