The UK has officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership as a fully-fledged member, potentially boosting the country’s economy by £2 billion a year in the long run…reports Asian Lite News
The UK has officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as a fully-fledged member, potentially boosting the UK economy by £2 billion a year in the long run.
CPTPP is a major trade bloc whose members – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and now the UK – have a combined GDP of £12 trillion.
The UK’s accession is estimated to benefit all UK nations and regions in the long run, relative to 2019 values, with boosts of £240 million for Scotland, £110 million for Wales, and £70 million for Northern Ireland. All English regions are also estimated to gain, including £450 million for the South East and £310 million for the North West.
From today businesses across the country will face lower tariffs and fewer barriers when selling to economies across three continents, with the financial services, manufacturing and food and drink sectors in particular set to benefit, helping to support the Government’s Plan for Change by boosting household wages by £1 billion every year and delivering on one of the five missions of kickstarting economic growth.
Business and Trade Secretary Jonathan Reynolds said, “Britain is uniquely placed to take advantage of exciting new markets, while strengthening existing relationships. Today’s news is further proof that the UK is a wonderful place to do business, with an open, outward looking economy driving the growth people can feel in their communities. Agreements like this boost trade and create opportunities for UK companies abroad. This is a proven way to support jobs, raise wages, and drive investment across the country which is key to this Government’s mission to deliver economic growth. Our Trade Strategy, published next year, will finally put in place a long-term, strategic plan for international trade that helps businesses and consumers and, ultimately, grows the economy.”
CPTPP is designed to expand over time, further growing the economic and strategic benefits of the agreement. Costa Rica was recently announced as the next country to go through the process of joining, and other economies such as Indonesia – the largest economy in Southeast Asia, with a GDP of over £1 trillion and home to around 280 million people in 2023 – have already expressed an eagerness to join the bloc.
CEO of HSBC UK Ian Stuart said, “Being part of the CPTPP signals that the UK is open for business with some of the world’s most exciting growth markets. Since the announcement of the UK’s accession in July 2023, we have seen an increase in payments between the CPTPP markets and the UK, and we expect this growth to continue. As the world’s leading trade bank, with deep roots across many CPTPP countries, we are well-positioned to connect UK businesses with growth opportunities in markets such as Japan, Singapore, New Zealand, Vietnam, Malaysia, and Australia.”
Chairman and CEO of Chivas Brothers Jean-Etienne Gourgues said, “At a time of increasing barriers to trade globally, the UK’s accession to the CPTPP is welcome news for Chivas Brothers Scotch whisky business. Improved access to markets in dynamic regions like South East Asia and Latin America in a trading bloc which covers almost a fifth of the total value of Scotch whisky exports should help boost our £1BN annual exports.”
Chief Executive Officer of Scalerr Matthew Borthwick said, “International expansion isn’t just for the big businesses out there. Due to agreements like the CPTPP, UK SMEs will also benefit, making it easier to trade with CPTPP countries. As a tech scale-up consultancy with customers across the world, we at Scalerr welcome the support the CPTPP will provide by reducing costs, easing administrative burdens, and facilitating international trade.”
Sectors like automotive and food and drink will be able to benefit from CPTPP membership, including through modern “rules of origin” provisions which allow goods to qualify for lower tariffs when built from parts from CPTPP countries then exported to a CPTPP country. For example, a UK car engine manufacturer using components from other CPTPP countries could more easily qualify for lower tariffs when exporting the final engine within CPTPP.
UK services firms, which employ over 80% of our workforce, could also find it easier to export their services to CPTPP countries, with firms allowed to manage funds across the world from the UK and provide services to CPTPP markets on a level playing field with domestic firms in key sectors.
Prices on consumer goods could also fall if savings are passed on by importers, with tariffs removed on items like fruit juices from Peru and vacuum cleaners from Malaysia.
Through CPTPP, the UK now has free trade deals with Malaysia and Brunei for the first time, economies with a combined GDP of over £330 billion last year.
CPTPP’s entry into force comes as the UK edges closer to securing trade deals with partners such as the Gulf Cooperation Council, India, Switzerland and South Korea. These form one half of this government’s twin-track approach to trade which seeks to reset our relationship with the EU at the same time as striking new trade deals.
ALSO READ: Moldovan Foreign Minister in India for first official visit
