The UK formally acceded to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) yesterday (15 December).
The deal’s rules will now come into effect for trade between the UK and the following countries that have ratified the UK’s membership: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
“Agreements like this boost trade and create opportunities for UK companies abroad,” said business and trade secretary Jonathan Reynolds.
“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.”
‘New opportunities’
While bilateral deals already existed with most of these countries, the CPTPP agreement marks a significant change for trade with Malaysia and Brunei, which the UK is gaining preferential arrangements with for the first time since Brexit.
The deal will enter force with Australia from 24 December. Canada and Mexico are still to ratify the UK’s membership.
“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,” said Marco Forgione, the director general of the Chartered Institute of Export & International Trade.
“This is an opportunity which can help reshape the UK economy.”
John Alty, a former leading civil servant at the Department for Business and Trade (DBT) who sits on the Chartered Institute’s board, told Politico that the deal will offer “new opportunities” for UK businesses.
£2bn boost – ‘in the long run’
Alty added, though, that the deal is “not a replacement” for trade with the EU – the UK’s largest trading partner and closest neighbour.
Its overall economic impact has been questioned previously, with government forecasts in 2023 predicting a modest 0.08% boost to GDP over the next decade, according to the BBC.
However, the government was more optimistic on Sunday, claiming that the deal will boost the economy by “£2bn a year in the long run”.
This boost will impact all parts of the UK, including £240m in additional productivity in Scotland, £110m in Wales and £70m in Northern Ireland.
‘Real work’ starts now
The “real work” of supporting businesses to make the most of the new deal starts now though, according to Forgione.
“The real work begins now 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.”
The government has published a new collection of guidance to help businesses make the most of the agreement, including specific support for SMEs.
It also offers a range of market guides for all of the countries included as part of the agreement, which can be accessed here.
Strategic support
Reynolds has also said that the government’s Trade Strategy, which is due to be published next year, will include a “plan” to help businesses make the most of opportunities like CPTPP.
“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.”
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