The UK will join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a vast free trade area of 11 countries spanning the Indo-Pacific, the UK government has announced.
The agreement follows two years of negotiations by the Department for Business and Trade and puts the UK at the heart of a dynamic group of economies, as the first European member and first new member since CPTPP was created. The bloc is home to more 500 million people and will be worth 15% of global GDP once the UK joins.
Being part of CPTPP aims to support UK jobs and economic growth across the country, with every nation and region expected to benefit. More than 99 percent of UK goods exports to CPTPP countries will now be eligible for zero tariffs, including key UK exports such as cars, machinery, chocolate, cheese, gin and whisky. Total UK exports to CPTPP countries were already worth £60.5 billion in the 12 months to the end of September 2022 and are set to grow under CPTPP.
Membership is a gateway to the wider Indo-Pacific region, which has 60% of the world’s population and is set to account for the majority (54%) of global economic growth and around half of the world’s billion middle-class consumers in the decades ahead.
Additional benefits of UK accession to CPTPP include:
• Increased flexibility: Modern ‘rules of origin’ could make British businesses more competitive by allowing them to trade more freely across the bloc. For example, UK car manufacturers could sell car engines tariff-free to a car maker in the bloc who could then sell those cars tariff-free to any member country. This is currently not possible under all the bilateral trade agreements the UK has in place with CPTPP members and will help exporters diversify their supply chains and create new export opportunities.
• Pro-investment: Investment between the UK and CPTPP countries is expected to increase as the agreement contains provisions to limit barriers and encourage more inward investment. Inward investment stocks to the UK from CPTPP countries were worth £182 billion in 2021.
• New markets: Joining means the UK will have a Free Trade Agreement with Malaysia for the first time, giving businesses far more access to an economy worth £271 billion in GDP in 2021. Tariffs of around 80% will be eliminated on UK exports of whisky and 30% on UK exports of cars, helping the UK get a larger share of the market.
By Made in Britain 3 months ago | International trade: exports and imports