The future of UK trade in the Asia Pacific region

Business regards the Asia Pacific region as crucial for the UK as it leaves the EU. While trade relations here can never replace the trading relationship with the EU, the region represents the high-end growth potential of the global economy.

The CBI welcomed the Department for International Trade’s (DIT) consultation last year into the future trading relationship with the Asia Pacific region via possible accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), and bilateral agreements with Australia and New Zealand.

The countries of the Asia Pacific region covered by the agreements under consideration represent a collection of both strongly established partners and emerging growth markets for UK business. With over half the countries being members of the Commonwealth, as well as the inclusion of Japan, the UK benefits from both a deep shared history and well-developed commercial ties with the region.

The UK economy will need broad, comprehensive and modern provisions which deliver for the modern means of doing business. CPTPP goes a long way toward achieving this ambition across several core sectors, but further work is needed with business to consider how to ensure the current text does not prejudice market access with the EU, as well as how to modernise the agreement in future rounds to add more depth.

What are we calling for?

• Further and extensive business engagement if accession to CPTPP is pursued by the government, identifying offensive and defensive interests as well as compatibility with a close economic relationship with the EU.
• Examine the sustainability, labour and environmental chapters of the agreement.
• Look at the regulatory mutual recognition or alignment needed to guarantee sustained and ever-increasing market access for services companies.
• Ensure future regulatory alignment does not cross over Single Market regulations or complicate the relationship with the EU.

In this response, we address:

• What is the trade outlook of the UK in the Asia Pacific region?
• What should the UK’s trade strategy be for the region?
• What impact will Brexit have?
• What are the next steps?