The UK has signed its most significant trade agreement since leaving the EU by joining the Indo-Pacific trading bloc.
The deal, which took two years of negotiations to strike, will unlock access to a region worth £11 trillion a year.
UK firms will now have increased access to markets including Canada, Mexico, Australia, Japan, Vietnam, and Singapore, with tariffs on food, drink and car exports expected to be cut.
The value to the UK economy is expected to be £1.8bn – still far below the economic cost of leaving the EU.
Prime Minister Rishi Sunak said of the deal that: “We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms. As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation.
“Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies, as the first new nation and first European country to join. British businesses will now enjoy unparalleled access to markets from Europe to the south Pacific.”
The deal has been welcomed by business leaders, with CBI director general Matthew Fell noting: “Joining CPTPP is a real milestone for the UK and for British industry. Not only does the agreement provide greater access to a group of fast growth economies representing 14% of global GDP and over 500 million consumers, but membership reinforces the UK’s commitment to building partnerships in an increasingly fragmented world.
“CPTPP countries and business need to work together to future proof the rules-based trading system and stimulate growth with a focus on digital, services and resilient supply chains.”
The deal comes as UK officials are hopeful that a new agreement reached with the EU over trade provisions for Northern Ireland may help unlock trade negotiations with the USA – something two presidents have put on hold until the fallout from Brexit was solved.