With the US turning towards protectionism, should the UK take this opportunity to join the TPP?
Geoffrey Yu, head of the UK chief investment office at UBS Wealth Management, says NO.
The UK needs to be imaginative when it comes to post-Brexit trade agreements, looking beyond “traditional” partners such as the US. The Trans-Pacific Partnership (TPP) would be a sensible place to start.
The TPP-11’s collective GDP is just over 70 per cent of the EU (excluding the UK). Future growth will far surpass that of the EU, and the provision for labour standards, market access, and contract enforcement is strong.
Most importantly, it is wrong to think of trade as a zero-sum affair, which seems to be the White House’s view for now. TPP membership does not preclude the UK from pursuing additional and overlapping bilateral or multilateral arrangements. Important non-members such as the US, China and South Korea will all welcome a free trade agreement with the UK. Some prioritisation is necessary, but then again there is no such thing as perfect sequencing in such matters. For now, TPP is a large fruit which is not hung up too high, and one we should grab.
Emily Redding, director of think tank platform Smart Thinking, says NO.
A natural reaction to a potential trade war can be the desire to huddle closer to other countries in a trade agreement.
But the increasingly rapid dance towards protectionism from the US is not a pressing reason for the UK to join the Trans-Pacific Partnership (TPP) – mainly because it is not just the tariff or non-tariff barriers that are especially hampering UK exports to the Asia Pacific region.
The UK sends 43 per cent of its exports to the EU. This is down in large part to the Single Market and the absence of tariffs and tiresome customs checks, but also because the EU is physically right on our doorstep. And trade is still, even today, based a lot around geography.
This is particularly true for SMEs, which often don’t have the resources or capacity to head further afield.
Britain could join the TPP, but unless UK business shows an increased appetite for exporting and exploring far-flung markets, it won’t be a defence against rising US protectionism.
Read more: There can be no winners in a trade war