UK has officially joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as a fully-fledged member, on December 15, 2024, marking a significant milestone that could boost the UK economy by £2 billion (~$2.52 billion) annually in the long run.
The UK has officially joined the CPTPP, a trade bloc with a combined GDP of £12 trillion ($15.12 trillion), boosting the UK economy by £2 billion ($2.52 billion) annually.
Benefits include reduced tariffs, regional growth, and new trade deals with Malaysia and Brunei.
This milestone supports jobs, wages, and global market access for UK businesses and SMEs.
UK’s membership is expected to benefit all regions, with long-term gains of £240 million ($302.4 million) for Scotland, £110 million ($138.6 million) for Wales, and £70 million ($88.2 million) for Northern Ireland. English regions, too, are projected to see gains, with the Southeast benefitting by £450 million ($567 million) and the Northwest by £310 million (~$390.6 million).
UK businesses, particularly those in financial services and manufacturing, will face lower tariffs and fewer barriers when trading with countries across three continents. This will support the government’s Plan for Change, helping boost household wages by £1 billion (~$1.26 billion) annually and kickstarting economic growth, the department for business and trade said in a media release.
Through CPTPP, the UK gains free trade deals with Malaysia and Brunei for the first time, economies with a combined GDP of over £330 billion (~$415.8 billion) in 2023.
The UK’s entry into CPTPP coincides with ongoing trade deal negotiations with partners such as the Gulf Cooperation Council, India, Switzerland, and South Korea, as part of the government’s twin-track approach to trade aimed at re-shaping its global economic relationships.
CPTPP is a major trade bloc, with members including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and now the UK. The combined GDP of these nations totals £12 trillion (~$15.12 trillion).
The trade bloc is set to expand over time, enhancing its economic and strategic benefits. Costa Rica is the latest country to begin the process of joining, and other economies, including Indonesia, the largest economy in Southeast Asia, have expressed interest in joining the bloc.
“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,” said Jonathan Reynolds, business and trade secretary.
“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,” Reynolds added.
“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,” stated Ian Stuart, CEO of HSBC UK.
“This is a red-letter day for our traders. There are few multi-national trade agreements like this one. It connects us to a fast-growing region of the global economy and will create new opportunities for both inward and outbound investment. We look forward to working with the UK Government, and others, to ensure firms get the best possible access to this thriving market within the global trade system,” William Bain, head of Trade Policy at BCC, said in a press release.
“The United Kingdom’s membership of the CPTPP is great news for all who support free trade and economic security in our region. At a time of some uncertainty in global trade, the UK’s reputation and influence is a powerful endorsement of the CPTPP and its aspiration to facilitate prosperity and security through new trade opportunities and increasingly high standards. The CPTPP’s UK membership is a strong fillip for our Chamber’s work supporting the UK and Australian Governments and our members on trade and investment,” said Ticky Fullerton, CEO of the Australian British Chamber of Commerce.
“With CPTPP coming into force, this gives UK exporters more options, increased tariff reductions and more viable markets. With an expected GDP of 7 per cent in 2024, a target for 8 per cent in 2025 and a fast-growing middle class. Vietnam is one market I am sure will garner huge interest from UK companies and we are here to drive and support that growth,” Matt Ryland, executive director of the British Chamber of Commerce Vietnam, said.
Fibre2Fashion News Desk (HU)
