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The UK is set to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) later this year after receiving Royal Assent.
Last July, after two years of talks, Business and Trade Secretary Kemi Badenoch signed the treaty to join the Indo-Pacific trade group. This move is anticipated to increase the group’s combined GDP to £12 trillion in 2022, representing 15% of the global economy.
The UK’s inclusion in the CPTPP, confirmed on 20 March with the Royal Assent, marks a significant step towards membership. The country’s entry will make over 99% of its current goods exports to CPTPP nations, such as Scotch whisky and automobiles, eligible for zero tariffs.
Kemi Badenoch expressed her satisfaction, stating, “I am delighted that the CPTPP Bill has become law – a major step towards the UK becoming a full-fledged member of the Indo-Pacific bloc and the many benefits that will come with that membership. We are leveraging our freedoms as an independent trading nation to open-up a new era of partnership with the fast-growing economies of tomorrow. Becoming a member of CPTPP offers brilliant new opportunities for British businesses and consumers through greater access to a market of over 500 million people – helping to grow the UK economy.”
Greg Hands, Minister of State for Trade Policy, highlighted the advantages for British businesses, urging them to prepare for the benefits of the deal, “This is exciting news for British businesses up and down the country. My message to the British business community is clear – start looking now at what this deal can do for you, so you are ready to take full advantage of the brilliant opportunities it presents when the deal comes into force.”
William Bain from the British Chambers of Commerce saw the Royal Assent as a milestone for UK trade: “Royal Assent for CPTPP is a red-letter day for our traders. UK companies will have more flexibility in their supply and manufacturing chains, easier ability to transfer data, and stronger procurement and investment opportunities in a fast-growing part of the global economy. We are looking forward to working with Government to ensure our firms can use these improved trading conditions to drive export growth across the other 11 members, from the Americas to Asia-Pacific.”
Marco Forgione of the Institute of Export & International Trade commented on the broader economic implications, “This is an important event which will help reshape the UK economy for the future. As well as trade in goods and preferential agreements on cumulation and rules of origin, entry into CPTPP opens up high growth markets to the UK’s world leading services sectors. The partnership with CPTPP nations in South East Asia, Central and South America can help us build resilient and robust supply chains, which are essential in an increasingly uncertain geo-political landscape where trade is being weaponised. As we’ve seen with the success of the Australia Free Trade Agreement there is tremendous demand for U.K. goods and services in CPTPP markets.”
The UK’s CPTPP membership is notable as it will be the first European country and the first new member since the partnership’s formation, a step that would not have been possible had it remained within the EU.
This agreement opens the door to the Indo-Pacific, a region poised for significant growth and home to a large portion of the global middle class in the coming years, offering British businesses new opportunities, reducing bureaucracy for exporters, and supporting employment.
With the CPTPP now ratified, the government is set to implement technical secondary legislation to facilitate the UK’s ratification of its CPTPP accession as swiftly as possible.
The formal acceptance of the terms signed with New Zealand, acting as the CPTPP depository, is expected by mid-July 2024. The ratification of UK accession by other parties, with Japan and Singapore having already done so, is required for the agreement to take effect, anticipated by year’s end.
