Brexit: CPTPP trade deal big talk, tiny number: Ian McConnell

Prime Minister Rishi Sunak appeared desperate to make as much as humanly possible of what the Conservative Government billed as the UK striking its “biggest trade deal since Brexit”.

Many other arch-Brexiters meanwhile brought to mind peacocks fanning their feathers, so keen apparently were some to try to intimidate or otherwise challenge, with their supposedly wonderful news on the CPTPP, anyone who would dare cry foul over their European Union exit folly.

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Most of them had probably never heard of this Indo-Pacific alliance a few years ago. However, the arch-Brexiters nevertheless seemed to be as proud as punch they were now going to be a part of it.

The UK Cabinet is obviously full of Brexiters, and these ministers have had to spin like billy-o as the simple facts around their foolish crusade have just not fitted their narrative at all. You would hope they would know fine well the score with the CPTPP even as they crowed about it.

One enormous problem, however, is that their Brexiter acolytes seem to be accepting at face value whatever claims of success from the European Union exit crusade are thrown their way.

Brexit remains an emotive and divisive subject, without a doubt.

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So it has always been best to just look at the cold numbers, where they exist. And this is no different when it comes to assessing the impact of the CPTPP.

The UK Government’s own assessment is that joining the currently 11-nation CPTPP will boost the country’s annual gross domestic product by just 0.08 per cent in the long run.

The Brexiter peacocks might be a bit surprised to learn this, you would think.

In any case, the next obvious step is to put this in context.

Office for Budget Responsibility chairman Richard Hughes, when asked late last month by the BBC’s Laura Kuenssberg about how much stronger the UK economy would be had the country stayed in the EU, replied: “We think that in the long run it reduces our overall output by around 4% compared with had we remained in the EU.”

For the avoidance of doubt, 4% is 50 times 0.08%.

The OBR was set up in 2010 by the Conservatives, just after they came to power, to provide independent forecasts.

The Theresa May government’s projections, published in November 2018, showed Brexit would, with an average free trade deal with the EU, result in UK gross domestic product in 15 years’ time being 4.9% lower than if the country had stayed in the bloc if there were no change to migration arrangements. Or 6.7% worse on the basis of zero net inflow of workers from European Economic Area countries. There has been a major clampdown on immigration from EEA countries since.

What is clear from myriad forecasts and analyses is that there is general agreement among the experts that Brexit is having a hugely detrimental effect on the UK economy. And we must remember, in the face of the dizzying spin, that Brexit is anything but “done”. Its effects will play out over years and decades.

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In contrast, it is surely impossible to argue in any way whatsoever that 0.08% is major or even meaningful. The fact that such a tiny boost is projected from the biggest trade deal struck by the UK since Brexit really says it all.

However, it seemed Mr Sunak was not going to let this tiny number rain on his parade.

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He proclaimed: “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.”

And he was not done there.

Mr Sunak added: “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 UK Government was, of course, not trumpeting its 0.08% figure when the CPTPP deal was announced last week.

Rather it declared that it was joining “a huge trade bloc in the Indo-Pacific which will now have a total GDP of £11 trillion”.

Of course, the number that matters is the perceived boost to annual UK economic output over the long run – that pesky (for the Brexiters) 0.08%. And the relevant comparative is absolutely what is being lost as a result of Brexit – which on the OBR’s estimate is 50 times as much and on the May government projections is even more. The combined GDP of the CPTPP members, many of which the UK has trade deals with anyway, is not really relevant.

There might be a simple reason that the UK is the first European country to join the CPTPP trade bloc ¬– that this is a group of Indo-Pacific nations. The UK is not in the Indo-Pacific, and in fact is rather far away from it, as are other European countries.

The EU is the UK’s largest trading partner by virtue of its geographical proximity.

Since time immemorial, peoples have traded with their closest neighbours.

Yet the Brexiter Tories appear absolutely delighted that the UK has lost frictionless trade with the huge bloc that is the EEA and is joining a distant partnership.

At times, it seems the Brexiters are just being thrawn for the sake of it. Or are they just hell-bent on trying to turn up any supposed benefit of Brexit, when there are none? Is it that they do not understand? Or is it a combination of all of these things, or something else altogether?

It is not entirely apparent what is driving this strange, logic-defying behaviour. However, what is crystal clear is that the behaviour is costing the UK dearly.