UK Prime Minister Boris Johnson is pushing his country closer to Asia. Photo:

Fresh from its fraught exit from the European Union, the United Kingdom is pursuing its strategic future in Asia. The dynamic economies of the region will be central to its post-Brexit “Global Britain” strategy in an increasingly uncertain international environment. 

This year marks the UK’s assumption of major global roles, including the rotating presidency of the G7 powers as well as the United Nations Security Council. It also marks the country’s official application to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) – a trade pact that covers 11 nations from the Americas to Asia representing 13.4% of global GDP (US$13.5 trillion) and nearly 500 million consumers.  

UK Prime Minister Boris Johnson hailed the formal start of accession talks to the world’s third-largest bloc this week as a key step towards “bring[ing] enormous economic benefits for the people of Britain.”

“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade,” he added. 

Crucially, Britain’s pivot to Asia is also part of broader efforts by the US and its Western allies to counter China’s perceived as predatory trade and investment practices by providing alternative initiatives. The CPTPP, a derivate of the US-backed Trans-Pacific Partnership Agreement (TPP) that was abandoned by the Trump administration, excludes China. 

The newly-inaugurated Biden administration has signaled its commitment to either rejoin the trade agreement or, alternatively, push for an expanded version that includes like-minded powers and democracies. 

The UK’s decision to join the mega-trading regime was not a surprise. Britain was already a trailblazer in terms of its Asia strategy, becoming the first European country to join the Beijing-led Asia Infrastructure Investment Bank (AIIB) in 2015.

Throughout the Brexit negotiations, London also proactively pursued trade deals with various Asian countries, especially China, to compensate for losses from its direct access to EU markets. 

People watch the 65,000-tonne British aircraft carrier HMS Queen Elizabeth in Portsmouth Harbour, southern England, on August 16, 2017. Photo: AFP/Ben Stansall

Souring relations with China

Under the Johnson government, however, relations with Beijing have dramatically deteriorated, with Britain taking a tougher stance on China’s high-tech investments as well as aggressive behavior in international waters.

To China’s chagrin, Britain is set to deploy its newly-minted Queen Elizabeth-class aircraft carriers to the South China Sea in the coming year, augmenting its already robust military footprint in the region. 

Amid souring relations with China and an ugly divorce from the EU, Britain is now keen to find new trade and investment partners in Asia. Last December, it finalized the UK-Singapore free trade agreement (FTA), which came into effect on January 1 this year and allows British companies to, among other things, take an active role in state-of-the-art public projects in the Southeast Asian city-state. 

London is also seeking similar deals with other major regional economies, especially Vietnam, which like Singapore has also finalized FTA deals with the EU. In the future, other major Asian economies such as South Korea, Indonesia, Thailand and the Philippines may also join either bilateral or multilateral FTAs with Britain, which seems determined to reduce its dependence on both the EU and China. 

UK International Trade Secretary Liz Truss, who will oversee the crucial negotiations to join the CPTPP, has boasted: “We’re at the front of the queue and look forward to starting formal negotiations in the coming months.” 

The UK’s top trade official, Truss has claimed the CPTPP would offer “enormous opportunities,” especially since CPTPP nations, which includes major economies such as Japan, accounted for about 8% of the UK’s exports in 2019. 

“Joining CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU and deepen our ties with some of the fastest-growing markets in the world,” Truss said. 

“It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home,” she added. 

Japan welcomes UK

The move has received robust support from the British business community. The UK’s largest business lobby group, the Confederation of British Industry (CBI), has hailed the commencement on the CPTPP as a “new chapter for our independent trade policy.”

“Membership of the bloc has the potential to deliver new opportunities for UK business across different sectors,” the group said. 

However, the UK’s zeal to join the trade pact in Asia has raised eyebrows among the opposition, with Labor Party shadow international trade secretary Emily Thornberry criticizing a lack of transparency and an apparent “rush into joining another [trade deal] on the other side of the world without any meaningful public consultation at all.”

Japan, the biggest member and de facto leader of the CPTPP, warmly welcomed Britain’s decision. The Asian country’s trade negotiator Yasutoshi Nishimura said on Twitter that Britain would “demonstrate its strong determination to fully comply with high-standard obligations” of the free trade accord. 

“I believe that the UK’s accession request will have a great potential to expand the high-standard rules beyond the Asia-Pacific,” the Japanese minister tweeted. Back in 2018, Japan also finalized the world’s largest FTA with the EU in an apparent effort to counter US protectionism under the Trump administration as well as China’s growing economic influence.

The elephant in the room, however, is America. Crucially, the UK’s latest move coincided with renewed efforts by the newly-inaugurated Biden administration to increase its strategic footprint in the Indo-Pacific. 

Shortly after his election victory last November, then President-elect Biden underscored his commitment to overturn the protectionist policies of his predecessor and instead support high-quality trading regimes in cooperation with key allies in Asia and Europe with an eye on China. 

Leaders of ASEAN, Australia, China, Japan, Republic of Korea and New Zealand witnessed the signing of the Regional Comprehensive Economic Partnership, or RCEP, Agreement via an online platform on November 15, 2020. Photo: AFP

China fears

“We make up 25% of the world’s trading capacity, of the economy of the world. We need to be aligned with the other democracies – another 25% or more – so that we can set the rules of the road,” Biden said, emphasizing the need for a coordinated approach with like-minded powers and allies. 

The comment came only days after the conclusion of the other mega trading regime in Asia, the Regional Comprehensive Economic Partnership (RCEP), which includes China. Unlike the CPTPP, which demands massive regulatory changes among member states, the RCEP is largely a trade-facilitation regime that seeks to increase economic exchange through tariff reduction. 

Nonetheless, the US and its key allies are deeply worried about China’s growing economic influence in the region. Biden warned that in absence of a proactive US-led economic initiative, “China and others [will] dictate outcomes because they are the only game in town.” 

The new US administration has made it clear that their preference is for CPTTP-like agreements, which place a heavy emphasis on good governance, labor standards and environmental sustainability, precisely the elements that have been allegedly missing in China-led economic initiates. 

“One, we’re going to invest in American workers and make them more competitive. Number two, we’re going to make sure labor is at the table, and environmentalists are at the table in trade deals we make,” Biden said.