Why are the benefits of joining a £12 trillion Pacific trade bloc so tiny?

Reading the small print reveals the downside, Jon Stone explains

Trade secretary Kemi Badenoch (PA)

The government has been keen to trumpet the benefits of Britain joining CPTPP – a major pan-Pacific trading bloc. The bloc's economies are worth £12 trillion, a huge amount. Mayor players in the club include Australia, Canada, Japan, Malaysia, Mexico and Vietnam.

However, read the small print and the benefits to the UK from accession are tiny, just 0.08 per cent GDP growth over 10 years.

How can there be such a disconnect? A new piece of research by the UK Trade Policy Observatory at the University of Sussex helps explain why the benefits are so small.

The first and main reason is that CPTPP access doesn’t really change much about the status quo. This may seem odd, but the UK already has existing bilateral trade deals with all but two members of CPTPP.

Those members are Malaysia and Brunei, the second of which has an incredibly small population – smaller than Sheffield, in fact.

This in itself needn’t be a show-stopper: perhaps CPTPP could make it easier to trade with countries we already have existing trade deals with. But the researchers note that in many cases and for many products, the existing deals are simply better.

Why would the government bother to negotiate membership of this? Ministers argue that the bloc could grow, but the researchers are fairly sceptical of this claim. The biggest prize would be if China joined – but at the moment this seems like a geopolitical impossibility.

Other countries like Taiwan, which could also help, are deterred by the fact that China has said it wants to join, somewhat deadlocking the entry door.

So why join the bloc at all? The main reason seems to be, as usual, politics. The government left the EU’s single market and customs union because of pressure from Tory eurosceptics and needed to retroactively find a reason why that was a good idea.

Signing free trade agreements without the rest of the EU in tow is one new thing Brexit Britain can now do, so there has been a heavy emphasis on getting them signed. Unfortunately, the big prize of a deal with the US is now off the table, and CPTPP has been drafted in as the new “big one”.

There is a further irony here, though: remember those deals Britain already has with the CPTPP member states that mean CPTPP membership doesn’t do very much? Most of them are rollovers from the UK’s EU membership.