The United Kingdom has officially signed the treaty to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade bloc in New Zealand, heralding the beginning of the UK’s membership in this expansive and forward-looking trade deal spanning 12 economies across Asia and the Pacific.
During the signing ceremony in Auckland, the UK Secretary of State, accompanied by New Zealand Trade Minister Damien O’Connor, Canadian Trade Minister Mary Ng, Japanese Minister for Economic Revitalisation Goto Shigeyuki, and Australian Deputy Trade Minister Tim Ayres, put pen to paper on this monumental agreement. This formal confirmation follows the substantial conclusion of negotiations earlier this year. The UK Government will now initiate the process of ratifying the agreement, subject to parliamentary scrutiny, while other CPTPP countries undertake their own legislative procedures.
The signing comes at a time when a new government report reveals the significant impact of CPTPP on employment in Wales. In 2019, over 16,000 individuals were employed across 281 CPTPP-owned businesses in Wales, generating a combined turnover of £4.1 billion. Membership in the trade bloc is expected to stimulate further investment in Wales by CPTPP countries, which already amounted to £182 billion across the UK in 2021, by ensuring protections for investors.
Kemi Badenoch, speaking before the signing, expressed her delight, saying, “I’m delighted to be here in New Zealand to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.” She emphasized the UK’s status as an independent trading nation and highlighted the potential for economic growth and job creation within CPTPP-owned businesses.
The report also highlights the remarkable economic contribution of CPTPP companies. Although they constitute only 0.3% of all businesses in the UK, they generate an impressive 6.1% of the country’s total turnover—20 times higher than their representation in the business landscape.
The UK’s accession to CPTPP not only makes it the first European member but also the first new member since the trade bloc’s inception. Had the UK remained in the European Union, joining CPTPP would have been impossible. With the UK on board, CPTPP will now boast a combined GDP of £12 trillion, accounting for 15% of global GDP.
The UK Government will now take the necessary steps to bring the agreement into force, a process expected to be completed next year. Welsh businesses are set to benefit significantly from being part of CPTPP, as they exported goods worth over £1.3 billion to CPTPP countries in 2022 alone. Cardiff-based FinTech company Credas already recognizes the potential advantages, with CEO Tim Barnett stating, “The agreement for the UK to join CPTPP has already become a real catalyst for us, generating exciting opportunities by removing the barriers technology firms like Credas currently face when exporting.”
Membership in CPTPP means that more than 99% of the UK’s current goods exports to CPTPP countries will qualify for zero tariffs. This will particularly benefit dairy farmers, who will enjoy reduced tariffs on cheese and butter exports to Canada, Chile, Japan, and Mexico, building upon the £23.9 million worth of dairy products exported to these countries in 2022.
The agreement also serves as a gateway to the wider Indo-Pacific region, projected to witness the majority of global growth and house roughly half of the world’s middle-class consumers in the coming decades, thereby providing fresh opportunities for British businesses and bolstering employment prospects.
Additionally, countries such as South Korea, Uruguay, Costa Rica, and others have expressed their interest in joining the trade bloc, potentially expanding its GDP to over £14 trillion.
Ian Stuart, CEO at HSBC UK, emphasized the significance of the UK’s formal accession to CPTPP, stating, “The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation, and technology.” Stuart affirmed HSBC UK’s commitment to supporting UK businesses in realizing their full potential and accessing a world of opportunities.
Ian Galbraith, Group Strategy Director at Mott MacDonald, expressed strong support for the UK’s accession to CPTPP, highlighting the positive implications for his firm and the broader professional competence and competition rules established by the agreement. He stated, “The Partnership’s ambitious services and procurement chapters pave the way for greater recognition of professional competence in engineering and architecture, and establish open, fair, and transparent competition rules in government procurement, allowing world-leading firms like Mott MacDonald to win and service new contracts across the many countries covered by CPTPP.”
Marco Forgione, Director General of The Institute of Export & International Trade, lauded the agreement as a momentous occasion, stating, “Joining the CPTPP means that the UK has free trade access to rapidly expanding new markets and economies.” Forgione emphasized the tremendous opportunities for businesses, from small enterprises to large-scale organizations, to reach 500 million customers with fewer barriers, thereby unlocking significant potential for growth and prosperity.
With the UK’s formal signing of the CPTPP treaty, British businesses can now look forward to expanded trade access, increased opportunities, and enhanced economic prospects within this dynamic trade bloc.
