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Picture Courtesy: https://thediplomat.com/2024/12/uk-officially-joins-trans-pacific-trade-agreement/

Context:

The United Kingdom has officially become the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

About Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

It is a free trade agreement signed by 11 countries in 2018; Australia, Japan, Brunei, Canada, Chile, Malaysia, New Zealand, Mexico, Peru, Singapore, and Vietnam. Recently the UK joined as the 12th member.

It was originally known as the Trans-Pacific Partnership (TPP) but was renamed after the United States withdrew from the agreement in 2017 under President Donald Trump.

It requires countries to reduce or eliminate tariffs, and open up markets for services and investment. It also includes rules governing competition, intellectual property rights, and foreign company protections.

The agreement is regarded as a countermeasure to China's growing influence in the region. Despite this, China has applied to join the agreement, along with Taiwan, Ukraine, Costa Rica, Uruguay, and Ecuador.

What economic benefits are expected from the UK’s CPTPP membership?

The United Kingdom expects economic benefits from joining the CPTPP. While the UK already has trade agreements with nine of the 11 CPTPP members, the agreement is expected to boost the UK economy by £2 billion per year, which is equivalent to just 0.08% of GDP.

In 2022, the UK exported £64.7 billion of goods and services to the 11 CPTPP members. The provisions of the CPTPP may also provide better trade terms than current agreements. As the CPTPP grows and more members join, the UK will benefit from expanded trading opportunities.

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COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP (CPTPP)

Source:

The Diplomat

PRACTICE QUESTION

Q.Consider the following statements in the context of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP):

1. The current twelve members' economies collectively account for 20% of global GDP.

2. The CPTPP developed from the Trans-Pacific Partnership (TPP), which was ratified after the United States officially joined.

Which of the above statements is/are correct?

A) 1 only

B) 2 only

C) Both 1 and 2

D) Neither 1 nor 2

Answer: D

Explanation:

Statement 1 is incorrect:

The current twelve members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) combined economies account for 14.4% of global GDP, or approximately US$15.8 trillion as of 2024, making the CPTPP one of the world's largest free trade areas by GDP.

Statement 2 is incorrect:

The CPTPP evolved from the Trans-Pacific Partnership (TPP), which was never ratified due to the United States' withdrawal. The TPP was signed in 2016, but it never went into effect because the United States withdrew from it shortly after President Donald Trump's election.