The UK yesterday (16 July) formally signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Secretary of state for business and trade, Kemi Badenoch, was in New Zealand – surrounded by trade ministers from other CPTPP nations – to sign the UK up to the agreement, confirming the nation’s membership of the pacific trade bloc.
In late-March, members of the CPTPP agreed to let the UK join their ranks as the first new member since the bloc’s creation.
An independent trading nation
Currently, the group consists of 11 nations based predominantly in the Pacific – including Chile, Malaysia and Japan – with a combined population of over 500m people and accounts for 13% of global GDP.
Badenoch said:
“We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.”
Marco Forgione, director general of the Institute of Export & International Trade (IOE&IT), said that the UK’s membership was “an incredibly exciting moment”, not just for British businesses but for the wider British public too.
“Joining the CPTPP means that the UK has free trade access to rapidly expanding new markets and economies.
“For businesses, from small firms to large-scale organisations selling physical goods or services, the agreement represents a new gateway to 500 million customers who they can sell to with far fewer barriers. From whiskey to confectionary to cars to jewellery and clothing, the removal of tariffs will make our finest British products more readily available to consumers in the Indo-Pacific bloc.”
The government is hoping that membership will attract further investment in the UK from CPTPP nations, already worth £182bn 2021, by guaranteeing protections for investors.
The Department for Business and Trade (DBT) shared research showing that 1 in 100 UK workers were “employed by a CPTPP-owned business”.
A time of opportunity
Henriette Gjaerde, trade and customs stakeholder relationship specialist at IOE&IT, said:
“This milestone marks a significant step forward in the UK's global trade strategy, strengthening our relationship with some of the fastest-growing regions in the world. UK businesses will benefit from greater access to the markets of 11 countries, which including the UK as the 12th member account for a combined GDP of £12trn.
“This agreement can offer numerous opportunities for UK exporters, providing improved market access and reduced tariffs on goods. It can foster new partnerships across the Pacific region. This is a time of opportunity, and we look forward to supporting businesses in maximizing the opportunities this partnership offers.”
Among the benefits being highlighted, DBT says that 99% of UK food exports to the nations in the bloc will be tariff-free.
DBT is also pointing to advantages to be gained by each region of the UK, including a boost to Japanese-Welsh and Yorkshire-Malaysia trade links.
Warnings on overselling
However, some trade experts remained cool on the overall effects of the deal.
David Henig, director of the UK Trade Policy Project, said overall the benefits would be “modest at best”, and warned that any “overselling” could have a negative impact on trade policy.
Henig said that the supply chain integration was a useful aspect of the deal but that overall, the economic impact remained “trivial.”
Former diplomat Dmitry Grozoubinski repeated his May comments that “primary benefits are geostrategic, not economic” in relation to CPTPP accession
Ratification
Before the agreement comes into effect, the UK will have to go through a full ratification process, including parliamentary scrutiny. Further, a majority of CPTPP nations will need to ratify the agreement using their own domestic processes.
The government says they expect this process to be completed in 2024.
The UK is the first European nation to join the CPTPP, although Reuters reports that Ukraine has formally requested membership.