BANDAR SERI BEGAWAN – The UK is hoping to boost trade and investment to Brunei and the region after launching formal negotiations to join a key trans-Pacific trade deal last week.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) removes 95 percent of tariffs between its 11 members, which include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Britain’s high commissioner to Brunei, John Virgoe, said the UK’s accession to the agreement would facilitate FDI into new sectors and open up opportunities for UK and Brunei businesses.
“We already have significant investments in both countries, but the provisions in the CPTPP will facilitate further opportunities to grow investment,” he said in a recent interview with The Scoop.
“In the UK, food, pharmaceuticals and renewable energy are three areas of strength that we think are of interest to Brunei, and they will all be supported by CPTPP.”
Brunei’s government estimates that the CPTPP could potentially bring $1 billion to Bruneian businesses over the next five to 10 years through international joint ventures and increased market access.
The UK is also hoping to broaden the market for British legal, financial and professional services – a sector which generated £18.9 billion in receipts to CPTPP countries in 2019.
Post-Brexit, Britain looks East
Joining the trade pact also forms a key part of Britain’s post-Brexit pivot away from Europe and towards Asia, with almost 90 percent of world growth expected to take place outside the EU over the next five years.
“We left the European Union a few years ago and that involved leaving the single market, and we now have got our sights on forging new trading relationships with other parts of the world,” Virgoe said.
“Joining the CPTPP is a key economic pillar of our Indo-Pacific tilt, and the other is our application to become a dialogue partner of ASEAN.”
The CPTPP — called the “gold-standard” of trade agreements by its champions — accounted for 13 percent of global GDP in 2019, which would rise to 16 percent with the UK’s accession.
Britain also sees it as an important way to gain influence in a region where China is increasingly the dominant economic force, particularly after the United States withdrew from an earlier iteration of the CPTPP under then-president Donald Trump.
China is notably absent from the CPTPP, although it spearheaded a rival trade agreement called the Regional Comprehensive Economic Partnership (RCEP), which was signed last year to form the world’s largest trading bloc.
“The more CPTPP expands, the greater the benefits to the UK,” the UK Department of International Trade said in statement last week.
“And expansion is in its DNA – economies including the Philippines, Thailand, Taiwan, and Republic of Korea have all expressed an interest in joining. That’s why we want a seat at the table now, as the first new member. Then we can help shape its future development as it grows.”
Recasting Britain’s global role
“Global Britain” — the government’s tagline for its post-Brexit foreign policy — is intended to signal the UK’s desire to forge a broader political and economic destiny outside the EU.
Although Britain is located neither in Asia nor the Pacific, it hopes the UK’s accession to the CPTPP will help shape commerce and geopolitics in the region.
But whether it can reassert its influence on the world stage in the shadow of a rising China remains to be seen.
“We don’t just see ourselves as a regional power, but as a globally-engaged country,” said Virgoe.
“We already expanding our cooperation with ASEAN in a number of areas from COVID recovery; business regulation; climate change; and low carbon finance and renewable energy. And there’s a lot more to do.”