Liam Fox has been accused of burying his “head in the sand” over the impact of Brexit by touting the benefits of a new free trade agreement in the Pacific with countries that account for a small proportion of UK exports
The international trade secretary hailed the introduction of the new Trans-Pacific Partnership (CPTTP), which comes into force on Sunday, saying exports of key products such as Scotch whisky could be boosted if the UK joined the alliance after Brexit.
The agreement, which covers 11 countries around the Pacific rim, including Australia, Canada and Japan, will eliminate tariffs on 95 per cent of goods traded between states.
The British government has expressed its desire to join the alliance, as the UK will be able to sign independent trade deals for the first time in decades after it leaves the EU.
However, Labour MP Anna McMorrin said trade pacts such as CPTTP would not mitigate the impact of Brexit, and could force the UK to compromise on food and environmental standards.
“Even if the UK could eventually join the TPP, the other members account for just 8 per centof British exports, compared to our neighbours across Europe which account for almost half,” the People’s Vote supporter said.
She added: “Liam Fox is ending the year as he began it – with his head in the sand.
“The reality is that leaving the EU would damage our status as a global trading nation, putting at risk the trade deals we already have with more than 65 countries and leaving us desperate to sign up to trade deals for which we would have to lower our standards, and over which we have had no say in setting the rules.
“From watering down food and environmental standards, to granting more visas, to opening sectors of our economy in ways that could undercut UK businesses and agriculture, the obstacles to agreeing new deals – whether with the TPP countries or Trump’s UnitedStates – would be endless.”
She said the government’s own Brexit analysis says that even if the UK were to strike trade deals overnight with dozens of countries, this would in total add between just 0.1 per centand 0.4 per cent to GDP, compared to a 4 per cent hit from leaving the EU.
However, Mr Fox said the alliance could be a positive step for the UK and cited as an example scotch whisky, which faces tariff charges in the region such as 5 per cent when exporting to Australia.
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Scotch is very popular in Japan and the CPTPP countries account for 17.8 per cent of its global exports.
Mr Fox said: “Total trade between the UK and CPTPP members was worth £95bn last year and the UK joining could help British businesses further establish a foothold in the Asia-Pacific region, which will be an engine of growth in the 21st century.
“We are determined to deliver a free trade agenda that guarantees greater market access for existing UK exporters and helps more businesses, including SMEs, to capitalise on the opportunities that free trade brings.”
Martin Bell, of the Scotch Whisky Association, welcomed the push, adding: “The agreement already encompasses many important and growing markets for scotch whisky in a high-growth region.
“With more countries likely to join in the future, UK accession to CPTPP in time would be good for UK exporters.”