#UK#CPTPP#Trans-Pacific#freetradeagreement

UK asks to join fast-growing Pacific free trade area CPTPP

Joining the 11-nation Comprehensive and Progressive Trans-Pacific Partnership would increase UK access to fast-growing markets and main economies in APAC

|Jan 31|magazine6 min read

The UK Government’s International Trade Secretary Liz Truss is due to speak to ministers in Japan and New Zealand to request to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), with negotiations to start this year.

Joining the CPTPP would increase the UK’s access to fast-growing markets and major economies in APAC including Malaysia and Vietnam.

Joining the £9 trillion partnership would reduce tariffs while also creating opportunities for industries like tech and services.

UK trade with the group was worth £111 billion in 2020, and has grown by 8% a year since 2016. 

Benefits of CPTPP membership

Benefits that CPTPP membership will bring for businesses include:

  • Modern digital trade rules that allow data to flow freely between members, remove unnecessary barriers for businesses, and protect commercial source code and encryption.
  • Eliminating tariffs quicker on UK imports and exports.
  • Rules of Origin that allow content from any country within CPTPP to count as ‘originating’. For example, this would mean that cars made in the UK could use more Japanese-originating car parts, such as batteries.
  • Easier travel for businesspeople between CPTPP countries, such as the potential for faster and cheaper visas.

“Applying to be the first new country to join the CPTPP demonstrates our ambition to do business on the best terms with our friends and partners all over the world and be an enthusiastic champion of global free trade,” said UK Prime Minister Boris Johnson.

Truss added: “Joining CPTPP will create enormous opportunities for UK businesses that simply weren’t there as part of the EU and deepen our ties with some of the fastest-growing markets in the world.

“It will mean lower tariffs for car manufacturers and whisky producers, and better access for our brilliant services providers, delivering quality jobs and greater prosperity for people here at home.”

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What is the CPTPP?

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) was established in 2018 and is a free-trade agreement that currently involves 11 countries in the Asia-Pacific region. These include:

Canada
New Zealand
Australia
Singapore
Japan
Malaysia
Vietnam
Brunei Darussalam
Chile
Mexico
Peru

The countries included in the CPTPP account for more than 13% of global GDP, worth US$10.6 trillion.

The ‘progressive’ in the title is included as the aim is not simply about reducing costs and tariffs, but also protecting labour rights and environmental issues.

In December, South Korean President Moon Jae-in announced the country was also considering becoming a member of the CPTPP, stating it would help improve trade in the post-pandemic era.

The UK first raised the idea of joining the CPTPP in 2019. Then Japanese PM Shinzo Abe said the UK would be welcomed ‘with open arms’ while then Australian PM Scott Morrison said ‘the British would be pushing at an open door’.

UK government's request to join CPTPP
CPTPP