Britain has struck a deal to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a vast free trade area of 11 countries spanning the Indo-Pacific, the Prime Minister announced on the 31 March.
The historic agreement follows two years of intense 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 the trade partnership was created.
This is the biggest international trade deal for Britain since Brexit. The UK would have been unable to join the CPTPP as a member of the EU, demonstrating how the UK is seizing opportunities of these new post-Brexit trade freedoms to be able to drive growth across the nation.
CPTPP is home to more 500 million people and will be worth 15% of global GDP once the UK joins. It’s estimated that joining the trade bloc will boost the UK economy by £1.8 billion in the long run, with wages also forecast to rise by £800 million compared to 2019 levels.
Being part of CPTPP will support jobs and economic growth across the country, with every nation and region expected to benefit. More than 99% of UK goods exports to CPTPP countries will now be eligible for zero tariffs, including key UK exports such as cheese, cars, chocolate, machinery, gin and whisky.
Rishi Sunak, Prime Minister, commented on this trade development: “We are at our heart an open and free-trading nation, and this deal demonstrates the real economic benefits of our post-Brexit freedoms. As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation. Joining the CPTPP trade bloc puts the UK at the centre of a dynamic and growing group of Pacific economies, as the first new nation and first European country to join. British businesses will now enjoy unparalleled access to markets from Europe to the south Pacific.”
Negotiations to join the CPTPP began in June 2021, and concluded after an intense round of talks in Vietnam earlier this month. Representatives from all member countries agreed to the UK’s addition to the trade group.
Kemi Badenoch, Business and Trade Secretary said, “This is an important moment for the UK. Our accession to CPTPP sends a powerful signal that the UK is open for business and using our post-Brexit freedoms to reach out to new markets around the world and grow our economy. Joining CPTPP will support jobs and create opportunities for companies of all sizes and in all parts of the UK. It is about giving British businesses improved access to the countries that will be gateway to the wider Indo-Pacific region which is projected to make up the majority of global growth in the future.”
Joining CPTPP 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.
Reacting to the news that the UK has joined The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Marco Forgione, Director General of The Institute of Export & International Trade (IOE&IT), said: “We welcome the news of the UK’s imminent accession to CPTTP. This agreement not only reduces trade tariffs for goods, but also sets new rules in areas such as services, investment, intellectual property, digital trade and advanced manufacturing.
This is all good news for UK businesses, giving them greater access to one of the fastest growing regions in the world, accounting for around 13% of global GDP. It will also enhance our ties with countries we already have trading partnerships with, building more resilient supply chains between nations.
There are pioneering provisions to support growth of trade in services, particularly with regards to digital and mobility unlocking vast new potential for cross-border trade and investment. Advanced manufacturing opportunities will present a huge source of innovative development.
The addition of the UK into the CPTPP signals to the world that the core values of liberalised rules-based trade as a vehicle for good will continue to underpin international trade in the future.
We look forward to supporting both our members and the wider trading community in the CPTPP bloc to maximise the opportunities that this partnership will undoubtedly present.”
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International Trade Magazine
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