The UK is to finally join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) this weekend, giving it access to a market spanning five continents and 600 million people.
The agreement will enter force on Sunday (15 December) between the UK and the other signatory countries that have ratified the UK’s membership of the bloc.
Two to go
Ratifying countries include Japan, Singapore, Chile, New Zealand, Vietnam, Peru, Chile, Malaysia and Brunei, while the deal will also enter into force with Australia at the end of the month.
Canada and Mexico are also CPTPP members but haven’t yet ratified the UK’s membership of the deal. The UK has continuity agreements with both countries that maintain trading terms from its previous membership of the EU.
While the UK already had bilateral deals with Japan, Singapore, Chile, New Zealand, Peru, Australia and Chile, this weekend will see preferential trade terms entering into force with Malaysia and Brunei for the first time following Brexit.
Work begins now
Marco Forgione, the director general of the Chartered Institute of Export & International Trade, says that the “real work” now begins to help businesses make the most of the opportunities of CPTPP.
“CPTPP entering into force this weekend marks an important stage in the UK’s trading future,” he said.
“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.
“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.”
Cross-party celebration
Government ministers have also lauded the opportunities that CPTPP will create, with trade policy minister Douglas Alexander calling it “good news for UK businesses”.
Negotiations for the deal began under the previous Conservative government in June 2021, with accession agreed to in July 2023. The then-business and trade secretary, Kemi Badenoch, called CPTPP an “exciting, growing, forward-looking trade bloc”.
Her successor, Labour’s Jonathan Reynolds, has also called joining the pact a “real win for big-hitting British exporters”, saying they “stand to benefit from smoother trade and more than 99% of UK goods qualifying for zero tariffs across the bloc.”
Cumulation benefits
While the UK already has bilateral free trade agreements with multiple CPTPP countries – including notable, fresh post-Brexit deals with Australia and New Zealand – membership of the pact will open up new “options” for traders, experts from the Department for Business and Trade (DBT) recently said.
Speaking on a webinar hosted by the Chartered Institute last month, DBT’s CPTPP utilisation lead Olivia Herford said:
“The UK already has trade agreements with nine of the CPTPP members… CPTPP does not replace any of these, but it is going to add additional options for trade and provisions on top of these.”
One of these options is the ability for businesses to benefit from ‘cumulation’ – a customs practice whereby a product can qualify for preferential tariffs if it incorporates materials from one or more countries that are co-signatories of an applicable free trade agreement.
Speaking on the same webinar, the Chartered Institute’s international trade legislation senior advisor, Garima Srivastava, called this a “gamechanger”:
“UK firms can tap into inputs from multiple CPTPP countries without losing preferential tariff benefits.
“In sectors with complex supply chains like automotive or electronics, cumulation will simplify compliance with origin requirements.”
To find out how you can benefit from agreements like CPTPP, sign up to our training course on how to claim preferential tariffs.
