New analysis of the government’s post-Brexit trade deal with Asia-Pacific countries has revealed that predictions it will grow the economy by 0.08 per cent could be an overestimate.
Last month, trade secretary Kemi Badenoch downplayed estimates pertaining to the economic impact of the Trans-Pacific Partnership (CPTPP) deal, saying joining the trade bloc is “about the potential for growth tomorrow”.
But according to new estimates, even the paltry 0.08 per cent figure could be over-hyped!
Hidden in the small print of a technical document published by the Department for International Trade is a disclosure that suggests calculations could have been intentionally juiced up to make the deal sound more appealing.
The document states that officials could not employ their usual approach to calculating the GDP benefits of a deal, known as a “Melitz-style model”, because there were too many unknown variables.
Instead, the department used a so-called “Armington-style” model to get the number for CPTPP, which the document notes tend to produce higher GDP figures “for a given free trade agreement”.
Speaking to the Independent, Sam Lowe, a trade expert and senior visiting fellow at the King’s Policy Institute, said: “While the approach the government has taken is perfectly credible, the change in methodology does seem to have been made with the intention of making the GDP figure sound more impressive.”
Nick Thomas-Symonds, the shadow international trade secretary, described the government record on trade as “lamentable”.
“No wonder they feel the need to present figures in the most favourable way they can find. The OBR predict a 6.6 per cent fall in exports in 2023, a hit of over £51bn to the UK economy. That hammers UK growth and will make the cost of living crisis even worse.”
Others have taken to social media to lament the findings.
This tweet seems to sum things up quite succinctly:
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