Keir Starmer faces mounting pressure to focus on revitalizing the economy by deepening ties with the European Union, as the UK prepares to formally join a Pacific trade bloc that he previously dismissed as offering “very small” benefits.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade pact linking the UK with 11 Asia-Pacific countries, has been presented by Rishi Sunak’s government as a post-Brexit success.
However, critics argue its economic impact is negligible. Government projections initially claimed it would boost the UK economy by just 0.08 percent, a figure later revealed to be potentially overstated.
Last year, Starmer, then in opposition, expressed skepticism about the deal’s significance. “It’s good to have a new trade deal, but better to have a closer relationship with the EU to go alongside it,” he said at the time.
The economic fallout from Brexit continues to dominate discussions about the UK’s future trade strategy. Documents released alongside the Budget indicated that Brexit is set to reduce UK trade by 15 percent, a blow confirmed by the Office for Budget Responsibility (OBR).
“Weak growth in imports and exports over the medium term partly reflects the continuing impact of Brexit, which we expect to reduce the overall trade intensity of the UK economy by 15 percent in the long term,” the OBR reported.
Vote Leave campaigners had promised a trade boost during the 2016 referendum campaign, a claim now contradicted by stagnant economic data. Critics argue that the government’s focus on agreements like CPTPP is insufficient to counteract Brexit’s negative effects.
“Whatever the benefits of being part of the CPTPP, they can never come close to the benefits to the UK economy of being part of the single market. With the latest figures showing that our growth is flatlining, it’s time for common sense to finally prevail.”
Dominic Grieve, co-president of European Movement UK
CPTPP vs. EU, A Strategic Trade Divide
The CPTPP comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. While joining the trade bloc offers access to new markets, it pales in comparison to the EU’s single market in terms of economic integration and scale.
If the UK were to rejoin the EU, it would be required to exit the CPTPP, as independent trade agreements are incompatible with the EU’s single market and customs union rules. Despite this, Labour has so far ruled out rejoining the customs union or single market, maintaining that Brexit is irreversible.
The government insists that the UK can pursue a “twin-track approach” by engaging in global trade deals while improving EU ties.
A Department for Business and Trade spokesperson said, “The UK is pursuing a twin-track approach to trade, implementing CPTPP, as well as pursuing free trade agreements with the likes of India and the GCC, while simultaneously resetting the relationship with our European friends.”
The spokesperson added, “This will strengthen ties and tackle barriers to trade with the EU, to grow our economy and make working people better off.”
Starmer, who has vowed to “reset” relations with the EU, faces growing calls to accelerate his efforts. His critics claim he is not moving decisively enough to repair the economic damage wrought by Brexit.
Grieve urged Labour to take bolder action, stating, “Being serious about boosting our economy means being serious about forging a closer relationship with the European Union.”
For many, the CPTPP is seen as a symbolic, yet insufficient, solution to the broader challenges facing the UK economy. With Brexit’s economic costs now widely acknowledged, the debate over how to address its consequences is expected to intensify in the months ahead.
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