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The UK has completed its key step required for joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) earlier than expected. Minister for Trade Policy Greg Hands will announce this achievement to fellow members of the group during a meeting in Arequipa, Peru.
Joining the CPTPP, which will account for 15% of global GDP with the UK’s inclusion, means that over 99% of current UK goods exports to CPTPP members will be eligible for tariff-free trade. Encompassing 500 million consumers in some of the world’s largest current and future economies, this membership holds immense potential for increased trade.
Business and Trade Secretary Kemi Badenoch signed the agreement last July to join the CPTPP, a modern trade pact spanning 12 economies across Asia, the Pacific, and now Europe. Being part of the CPTPP will support jobs and economic growth across the UK, with every nation and region expected to benefit.
Only six more economies, in addition to the UK, need to ratify the agreement by October for it to enter into force by the end of the year. Singapore, Japan, and Chile have already ratified, with other countries in the process.
During a two-day visit, Minister Hands will also celebrate the conclusion of negotiations on a Double Taxation Agreement (DTA) with Peru. This agreement will protect businesses from being taxed twice – once in Peru and again in the UK, or vice versa.
By reducing costs and providing certainty, it is a major benefit for businesses in both countries and will foster substantial increases in bilateral trade and investment.
Minister for Trade Policy Greg Hands said, “The UK has been racing to get our ratification done because we know how much CPTPP will benefit British businesses, whether through access to new markets or cutting red tape on existing exports.
I’m delighted we were able to bring this forward, ahead of our original July forecast, so we can get the countdown to Entry into Force going as soon as possible.”
The UK aims to be an influential member of the CPTPP, ensuring its voice is heard on all key matters. The UK is already actively participating in meetings and discussions with CPTPP parties about the future of the agreement. Peru, a member of the bloc, is a longstanding trading partner for the UK, with bilateral trade valued at £1.8 billion last year.
William Bain, Head of Trade Policy at the British Chambers of Commerce, said, “There are few multi-national trade agreements like this one. The UK’s addition to this bloc will open up new opportunities for both inward and outward investment.
Trade rules will be more favourable for manufacturers looking to sell products to other member countries and data transfers for firms in the services sector will also be more straightforward.
Crucially, it will also give the UK a say in the bloc’s future development, making it a deal that will work for our traders both now and in the future.”
Marco Forgione, Director General of the Institute of Export & International Trade said, “The ratification of CPTPP marks an important stage in the UK’s trading future. British businesses now have tariff free access to some of fastest growing markets in the world to sell our goods and our world leading services. This is an opportunity which can help reshape the UK economy.
At a time when global trade has been weaponised, this partnership can help the UK establish resilient and robust supply chains across Southeast Asia, Central and South America. In a world of growing geo-political uncertainty, the expanding trading community of CPTPP nations offers an important counterpoint.
Now CPTPP is ratified the real work begins to make sure businesses understand how to take advantage of the immense opportunities for UK services and goods in CPTPP nations. There is a great opportunity for UK businesses to grow.”
Miles Celic, Chief Executive Officer, TheCityUK said, “The UK’s ratification of the CPTPP is another major milestone in the journey to finalising this strategically important deal. Britain will not only benefit from better access to some of the world’s fastest growing economies, it will also be able to help shape the future direction of a group which is increasingly important for the future of the global economy.”
Other benefits of UK accession to CPTPP include:
- Less red tape for the UK’s world-class services
- Increased flexibility via modern ‘rules of origin’ for British goods
- Investment provisions which limit barriers
- Cheaper import prices thanks to reduced tariffs
