NEW - Brexit Britain’s new free trade bloc set to overtake EU in total GDP & population
Indo-Pacific free trade area will eclipse EU - larger economy and 94% more consumers
Montage © Facts4EU.Org 2024
As we predicted, first of several large economies has applied to join UK in trans-pacific trade pact
Last week we received news that the new trading bloc (CPTPP) which the UK has signed up to - and which the UK will start benefiting from in December - will soon outnumber the EU's 'Single Market' with a larger combined GDP and with 94% more consumers.
Assuming it joins, Indonesia’s 281 million people will take the CPTPP past the size and value of the EU’s Single Market and Customs Union.
Photo credit : Coordinating Minister for Economic Affairs Airlangga Hartarto, press conference, Jakarta, 25 Sept 2024)
None of this would have been possible without Brexit. As usual no word of this very positive news has appeared on the BBC, Sky News or ITN, nor indeed has there been any announcement from No.10. Today the Facts4EU.Org think-tank, and independence campaigners CIBUK.Org, are pleased to publish this report in association with our partners at GB News.
A Brexit Facts4EU.Org Series – Supplementary
Brexit Britain’s newest and largest free trade agreement just keeps on getting better
Part I - 7th country ratifies UK’s entry, adding another 34 million consumers to UK’s potential market
Part II (This report) - With Indonesia the CPTPP trading bloc is set to completely eclipse the EU
When Indonesia joins the CPTPP, (assuming it is approved), this growing trade bloc will eclipse the EU in size
Below we show the effect of Indonesia joining the CPTPP after the UK this December, comparing the new combined bloc to the EU in terms of the size of its consumer market and its overall economic size.
CPTPP's consumers set to exceed EU's by 94%
CPTPP's GDP also set to exceed EU's
© Brexit Facts4EU.Org 2024 - click each to enlarge
By the time Indonesia joins, the CPTPP’s extra economic size will be even larger than the EU’s, as the CPTPP countries are growing faster than the EU27.
Indonesia's Minister for Economic Affairs commented :
"The Indonesian government has officially requested New Zealand as the Depository Country of the CPTPP to start the accession process from Indonesia and thank God they welcomed Indonesia's proposal.
"Today we are discussing with friendly countries that have joined to help Indonesia join and become part of the CPTPP."
- Airlangga Hartarto, Indonesian Minister for Economic Affairs, 25 Sept 2024
Brexit Facts4EU.Org Summary
Indonesia and the United Kingdom
1. About Indonesia
- Population :280.7 million (280,725,438) – 4th largest in the world
- GDP : $1.18 TRILLION ($1,178,924,195,814) – 16th largest in the world
- Growth rate : 5.0%
- Geographical size : 738,840 sq mi - 14th largest in the world
Indonesia comprises a large group of islands located near Malaysia, Singapore, the Philippines and Australia. The country has a population of over 270 million, making it a large potential consumer base for UK exporters and importers.
For more than three centuries Indonesia was a Dutch colony, gaining its independence after WWII. Today it is a presidential republic with an elected legislature, making it the world's third-largest democracy.
2. Young and fast-emerging middle class consumer base
Indonesia has over 100 million internet users. It is the world’s third-largest Facebook market and fifth-largest Twitter market. Demand from the new middle class is increasing for modern retail and consumer goods, healthcare, education and professional qualifications, ICT (information and communications technology), transport, construction, and manufacturing.
Indonesia’s economic growth is driven by its emerging middle class. International surveys show that Indonesians are trusting consumers, highly receptive to advertising and keen to try new things. They are typically young, IT savvy, and interested in new international brands.
3. Respect for British brands
UK companies are already flourishing in Indonesia, some with a presence that stretches back over 100 years. Major UK businesses operating in Indonesia include BP, Unilever, Shell, Standard Chartered Bank, Prudential, Rolls Royce and GlaxoSmithKline.
UK-Indonesia trade in goods and services 2023
The UK is the second largest exporter of services in the world and the majority of these were delivered by digital means. Easing digital trade via Indonesia’s pending accession to the CPTPP could unleash growth in UK services exports, already worth £658 million to Indonesia last year. Amongst other areas, there are opportunities for increased collaboration in areas such as food and drink, agriculture, education services, Indonesia’s energy transition, legal services and fintech.
Brexit Facts4EU.Org Summary
The UK’s trading relationship with Indonesia
- UK Exports : £1.6 bn
- UK Imports : £1.4 bn
- Total UK-Indonesia trade 2023 : £3.0 bn
- UK trade surplus : +£0.2 bn
[Source : Department for Business and Trade, 20 Sept 2024.]
UK businesses trading with Indonesia in 2023
- Around 3,000 UK VAT-registered businesses exported goods to Indonesia
- Around 2,200 UK VAT-registered businesses imported goods from Indonesia
- Total number of UK businesses involved in UK-Indonesia trade : 5,200
[Source : Department for Business and Trade, 20 Sept 2024.]
Employment supported by exports
- Exports to Indonesia supported around 18,500 jobs in the UK in 2020
- Exports to the UK supported around 183,900 jobs in Indonesia in 2020
[Source : Department for Business and Trade, 20 Sept 2024.]
Observations
Rejoiners should stop and think before they try to ridicule this news
Yes, Indonesia only just finished going through its internal processes on Wednesday last week, culminating in its formal application to join the CPTPP free trade area which the UK will be a part of in less than eight weeks' time. Nevertheless this is a very significant development.
When in August the Facts4EU.Org team first broke the story about the UK now acceding to this major international free trade bloc in December, we were keen to stress both its size and its future potential. We showed that with the accession of the UK this 'trans-Pacific Single Market' would number 31% more consumers than are in the EU's version. We then listed the countries which were lining up to follow the UK's move. Now we have the first which has done so : Indonesia.
When Indonesia is approved to join formally (which is highly likely to happen), the CPTPP trading bloc will not only be larger than the EU in terms of its population, it will also exceed the EU's Single Market in terms of its economic size.
The second major point to emphasize is that of economic growth. The simple fact is that CPTPP countries are growing faster than the EU. In the case of the new applicant, Indonesia, its growth rate last year was 5.0%. This compares with 0.4% for the EU.
Thirdly, we have no doubt that desperate Rejoiners will claim that the UK does a relatively small amount of trade with countries like Indonesia, completely missing the whole point of doing such deals. By being part of this new trade bloc the UK has the opportunity to grow its global exports significantly.
Finally, we would reiterate that the EU tried to negotiate to join the CPTPP and failed. The newly independent United Kingdom succeeded - something it could not have done if it had still been a member of the EU.
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[ Sources: Indonesian Government | Airlangga Hartarto, Indonesian Minister for Economic Affairs | UK Department for Business and Trade, 20 Sept 2024 | ONS | World Bank | UN population division ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Wed 02 Oct 2024
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