The UK has taken another step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), after the final passage of an act through Parliament.
Yesterday (20 March), the Department for Business and Trade (DBT) announced that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Act received royal assent from the King, formally putting the legislation into the statute books.
The Indo-Pacific trade group is worth a combined total of £12trn – 15% of the global economy – and DBT claims that over 99% of the UK’s current goods exports will now be eligible for zero tariffs.
Last March, the UK announced that it had reached an agreement with the CPTPP members to join, following two years of negotiations.
Take advantage
Ana Sofia German, trade agreement and trade preference support specialist at The Institute of Export & International Trade (IOE&IT), told the Daily Update that UK businesses should start reviewing existing agreements between the UK and other members, so that they’re prepared to maximise the CPTPP’s benefits.
“Businesses should take a close look at whether they export to any of the markets covered by the CPTPP and understand the additional benefits they can gain from it. By doing so, they can start preparing and be ready for when they can trade under the mega-regional agreement.
“Although the agreement is not expected to enter into force until the second half of 2024, the progress made signals a great opportunity for businesses to start considering how the agreement benefits them.”
‘Major step’
Business and trade secretary Kemi Badenoch said:
“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.
“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.”
DBT points to benefits such as “modern rules of origin” in the trade agreement, increased investment between the UK and CPTPP countries and new rules for digital trade.
‘Important event’
Director general of IOE&IT, Marco Forgione, said:
“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 geopolitical landscape where trade is being weaponised.”
The UK is the first European member of the trade bloc and the first new member since it was created in 2018.
The CPTPP was singled out on Tuesday (19 March) as a significant opportunity for UK traders by Lord McNicol, the shadow spokesperson for business and trade in the House of Lords, at an IOE&IT event on the trade potential of Teesside.
Future steps
Now that royal assent has been granted, DBT says that it will seek to pass secondary legislation to ensure that the UK can ratify accession as soon as possible.
Once this is done, the UK will formally accept the terms of entry and await other nations to formally agree to its entry.
Japan and Singapore have already ratified the UK’s accession, with six members’ needed in total for the UK’s accession to go ahead.
As German notes, the process should be completed by the end of the year, at which point the agreement will enter into force.