HONG KONG -- The U.K. will not rule out joining the Trans-Pacific Partnership trade pact after its exit from the European Union as the country looks for ways to mitigate the economic impact of the split, Britain's top trade official said.
U.K. International Trade Secretary Liam Fox spoke to Nikkei here Wednesday about his country's plans to manage the economic fallout from Brexit, of which he was a leading proponent.
The two sides agreed this week to an "implementation period" after Brexit comes into effect but while Britain is still a part of the single European market and customs union. The U.K. is not allowed to negotiate its own free trade agreements until its EU membership ends on March 29, 2019. The implementation period provides a buffer during which the U.K. can forge agreements while still benefiting from Europe's trade pacts.
"This is crucial for Britain to be able to have an independent trade policy" when the split becomes final, Fox said. The U.K. will have "time to think about how we might be able to improve" pacts the EU has signed, he said.
The U.K. is "interested" in the TPP, Fox said. Though the U.S. withdrew from the pact in early 2017, the remaining 11 nations include established and emerging economic powers in the Asia-Pacific. Britain hopes to tap into that region's growth potential. The EU has already reached trade agreements with major TPP economies. It has agreed to an economic partnership pact with Japan, and has signed a free trade agreement with Canada, Mexico and Singapore. The U.K. hopes to modify those agreements for its own purposes upon leaving the bloc, according to the trade official. The EU is exploring trade pacts with Australia and New Zealand as well.
Joining the TPP could bolster trade with all of these nations at once, helping the U.K. quickly mitigate some of the economic blow from Brexit. Fox noted however that the 11-member pact has not yet been ratified. Britain wants to "wait and see how this process goes" and determine "what will be in our interest," and then hold talks with the other participants, the official said. Britain has set up a working group on a free trade pact with the U.S., and wants to leave all options open -- including bilateral agreements -- in the Asia-Pacific, according to Fox.
As for China, the U.K. welcomes the country's "increasing overseas investment" and the "liberalization of the Chinese market," Fox said. "Opening up the Chinese service sector is particularly important for us."
But the country's overall lack of transparency and "lack of a clear distinction between state- and privately owned" businesses make it difficult to determine compliance with World Trade Organization rules, he said.
Fox visited the U.S. last week to discuss American tariffs on steel and aluminum. The unilateral levies, ostensibly imposed for national security reasons, are not the proper response to the multilateral problem of overproduction in the global steel market, according to the trade chief. Multilateral issues are best resolved through "multilateral rules," he said.
One of Britain's chief goals going forward is to create a single global services market encompassing the U.S., U.K. and Japan, Fox said -- a feat that will require "new, creative" tools and methods.